Contrasting Healthcare Realty Trust (NYSE:HR) & Sabra Healthcare REIT (SBRA)

Sabra Healthcare REIT (NASDAQ: SBRA) and Healthcare Realty Trust (NYSE:HR) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, dividends, risk, profitabiliy, institutional ownership and earnings.

Dividends

Sabra Healthcare REIT pays an annual dividend of $1.72 per share and has a dividend yield of 7.4%. Healthcare Realty Trust pays an annual dividend of $1.20 per share and has a dividend yield of 3.6%. Sabra Healthcare REIT pays out 119.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Healthcare Realty Trust pays out 126.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sabra Healthcare REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Sabra Healthcare REIT and Healthcare Realty Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sabra Healthcare REIT 1 6 1 0 2.00
Healthcare Realty Trust 1 5 4 0 2.30

Sabra Healthcare REIT currently has a consensus price target of $25.67, suggesting a potential upside of 10.39%. Healthcare Realty Trust has a consensus price target of $34.80, suggesting a potential upside of 4.69%. Given Sabra Healthcare REIT’s higher possible upside, equities analysts plainly believe Sabra Healthcare REIT is more favorable than Healthcare Realty Trust.

Profitability

This table compares Sabra Healthcare REIT and Healthcare Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sabra Healthcare REIT 40.22% 10.35% 4.66%
Healthcare Realty Trust 26.01% 6.89% 3.63%

Risk & Volatility

Sabra Healthcare REIT has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, Healthcare Realty Trust has a beta of 0.3, meaning that its stock price is 70% less volatile than the S&P 500.

Valuation and Earnings

This table compares Sabra Healthcare REIT and Healthcare Realty Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sabra Healthcare REIT N/A N/A N/A $1.44 16.15
Healthcare Realty Trust $415.93 million 9.31 $236.25 million $0.95 34.99

Healthcare Realty Trust has higher revenue and earnings than Sabra Healthcare REIT. Sabra Healthcare REIT is trading at a lower price-to-earnings ratio than Healthcare Realty Trust, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

99.1% of Sabra Healthcare REIT shares are held by institutional investors. Comparatively, 95.7% of Healthcare Realty Trust shares are held by institutional investors. 2.3% of Sabra Healthcare REIT shares are held by company insiders. Comparatively, 1.9% of Healthcare Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Sabra Healthcare REIT beats Healthcare Realty Trust on 10 of the 14 factors compared between the two stocks.

Sabra Healthcare REIT Company Profile

Sabra Health Care REIT, Inc. is a real estate investment trust. The Company, through its subsidiaries, owns and invests in real estate serving the healthcare industry. The Company’s segment includes investments in healthcare-related real estate properties. The Company’s primary business consists of acquiring, financing and owning real estate property to be leased to third-party tenants in the healthcare sector. As of December 31, 2016, the Company’s investment portfolio consisted of 183 real estate properties held for investment (consisting of 97 skilled nursing/transitional care facilities, 85 senior housing facilities, and one acute care hospital); 10 investments in loans receivable (consisting of four mortgage loans, one construction loan, one mezzanine loan, three pre-development loans and one debtor-in-possession (DIP) loan) and 12 preferred equity investments. It has properties located in New Hampshire, Texas, Florida, Kentucky, Ohio, Maryland and Nebraska, among others.

Healthcare Realty Trust Company Profile

Healthcare Realty Trust Incorporated is a self-managed and self-administered real estate investment trust. The Company owns, leases, manages, acquires, finances, develops and redevelops real estate properties associated primarily with the delivery of outpatient healthcare services across the United States. The Company provided property management services for 146 healthcare-related properties across the nation, totaling approximately 10.3 million square feet, as of December 31, 2016. As of December 31, 2016, the Company’s 202 owned real estate properties were located in 27 states and totaled approximately 14.6 million square feet. The Company’s medical office/outpatient facilities are located in various states of the United States, such as Alabama, Arizona, California, Colorado, District of Columbia, Florida, Hawaii, Illinois, Indiana, Iowa, Minnesota, Missouri, North Carolina, Oklahoma, Tennessee, Texas, Virginia and Washington.

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