MedEquities Realty Trust (NYSE: MRT) and Healthcare Trust of America (NYSE:HTA) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.
Insider and Institutional Ownership
97.6% of MedEquities Realty Trust shares are owned by institutional investors. Comparatively, 70.9% of Healthcare Trust of America shares are owned by institutional investors. 2.5% of MedEquities Realty Trust shares are owned by company insiders. Comparatively, 1.5% of Healthcare Trust of America shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This is a summary of recent recommendations and price targets for MedEquities Realty Trust and Healthcare Trust of America, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MedEquities Realty Trust||1||1||5||0||2.57|
|Healthcare Trust of America||0||0||8||1||3.11|
MedEquities Realty Trust presently has a consensus target price of $12.86, suggesting a potential upside of 12.98%. Healthcare Trust of America has a consensus target price of $34.50, suggesting a potential upside of 13.75%. Given Healthcare Trust of America’s stronger consensus rating and higher probable upside, analysts plainly believe Healthcare Trust of America is more favorable than MedEquities Realty Trust.
This table compares MedEquities Realty Trust and Healthcare Trust of America’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MedEquities Realty Trust||32.68%||5.58%||3.52%|
|Healthcare Trust of America||6.07%||1.42%||0.70%|
Earnings and Valuation
This table compares MedEquities Realty Trust and Healthcare Trust of America’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|MedEquities Realty Trust||$56.96 million||6.34||$46.67 million||$0.35||32.51|
|Healthcare Trust of America||$504.67 million||12.06||$301.67 million||$0.21||144.43|
Healthcare Trust of America has higher revenue and earnings than MedEquities Realty Trust. MedEquities Realty Trust is trading at a lower price-to-earnings ratio than Healthcare Trust of America, indicating that it is currently the more affordable of the two stocks.
MedEquities Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 7.4%. Healthcare Trust of America pays an annual dividend of $1.20 per share and has a dividend yield of 4.0%. MedEquities Realty Trust pays out 240.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Healthcare Trust of America pays out 571.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MedEquities Realty Trust has increased its dividend for 4 consecutive years. MedEquities Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
MedEquities Realty Trust beats Healthcare Trust of America on 9 of the 17 factors compared between the two stocks.
About MedEquities Realty Trust
MedEquities Realty Trust, Inc. is a real estate investment trust (REIT). The Company invests in a diversified mix of healthcare properties and healthcare-related real estate debt investments. The Company invests primarily in real estate across the acute and post-acute spectrum of care. It focuses on investing in various types of healthcare properties, including acute care hospitals; skilled nursing facilities; short-stay surgical and specialty hospitals, which focus on orthopedic, heart and other dedicated surgeries and specialty procedures; dedicated specialty hospitals, such as inpatient rehabilitation facilities, long-term acute care hospitals and facilities providing psychiatric care; physician clinics; diagnostic facilities; outpatient surgery centers, and facilities that support these services, such as medical office buildings. As of September 30, 2016, the Company’s portfolio included 24 healthcare facilities and one healthcare-related debt investment.
About Healthcare Trust of America
Healthcare Trust of America, Inc. is a real estate investment trust. The Company is an owner and operator of medical office buildings (MOBs) in the United States. The Company focuses on owning and operating MOBs that serve healthcare delivery and are located on health system campuses, near university medical centers, or in community core outpatient locations. As of December 31, 2016, the Company’s portfolio consisted of approximately 17.7 million square feet of gross leasable area. As of December 31, 2016, the Company’s portfolio included MOBs, such as single-tenant and multi-tenant, and other healthcare facilities, such as hospitals and senior care. As of December 31, 2016, the Company’s portfolio had 355 buildings located in 31 states. As of December 31, 2016, the Company’s properties were located in various states of the United States, such as Alabama, Arizona, California, Colorado, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Maryland, Michigan, Minnesota, Nevada and Utah.
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