Analyzing Welltower (HCN) & Universal Health Realty Income Trust (UHT)

Welltower (NYSE: HCN) and Universal Health Realty Income Trust (NYSE:UHT) are both financials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, valuation, earnings and dividends.

Risk & Volatility

Welltower has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, Universal Health Realty Income Trust has a beta of 0.35, meaning that its stock price is 65% less volatile than the S&P 500.

Dividends

Welltower pays an annual dividend of $3.48 per share and has a dividend yield of 5.9%. Universal Health Realty Income Trust pays an annual dividend of $2.66 per share and has a dividend yield of 3.9%. Welltower pays out 305.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Universal Health Realty Income Trust pays out 82.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Welltower has raised its dividend for 8 consecutive years and Universal Health Realty Income Trust has raised its dividend for 32 consecutive years.

Analyst Recommendations

This is a summary of current ratings and price targets for Welltower and Universal Health Realty Income Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Welltower 2 7 5 0 2.21
Universal Health Realty Income Trust 0 0 0 0 N/A

Welltower currently has a consensus price target of $71.83, indicating a potential upside of 21.07%. Given Welltower’s higher possible upside, analysts clearly believe Welltower is more favorable than Universal Health Realty Income Trust.

Profitability

This table compares Welltower and Universal Health Realty Income Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Welltower 22.67% 7.45% 3.82%
Universal Health Realty Income Trust 61.38% 8.12% 3.32%

Insider & Institutional Ownership

86.4% of Welltower shares are held by institutional investors. Comparatively, 60.6% of Universal Health Realty Income Trust shares are held by institutional investors. 0.2% of Welltower shares are held by insiders. Comparatively, 1.9% of Universal Health Realty Income Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Welltower and Universal Health Realty Income Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Welltower $4.28 billion 5.13 $1.08 billion $1.14 52.04
Universal Health Realty Income Trust $67.08 million 13.87 $17.21 million $3.24 20.91

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

About Welltower

Welltower Inc. invests with seniors housing operators, post-acute providers and health systems to fund real estate and infrastructure. The Company invests in seniors housing and healthcare real estate. It operates in three segments: triple-net, seniors housing operating and outpatient medical. Welltower, a real estate investment trust (REIT), owns interests in properties concentrated in markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities, and outpatient medical properties. Its triple-net properties include independent living facilities, independent supportive living facilities (Canada), continuing care retirement communities, assisted living facilities, care homes with and without nursing (the United Kingdom), Alzheimer’s/dementia care facilities, long-term/post-acute care facilities and hospitals. Its outpatient medical properties include outpatient medical buildings.

About Universal Health Realty Income Trust

Universal Health Realty Income Trust is a real estate investment trust (REIT). The Company invests in healthcare and human service related facilities, including acute care hospitals, rehabilitation hospitals, sub-acute facilities, surgery centers, free-standing emergency departments, childcare centers and medical office buildings (MOBs). As of February 28, 2017, the Company had 67 real estate investments located in 20 states in the United States consisting of six hospital facilities, including three acute care, one rehabilitation and two sub-acute; 54 MOBs; three free-standing emergency departments (FEDs), and four preschool and childcare centers. The Company’s facilities include Southwest Healthcare System, Inland Valley Campus, Wellington Regional Medical Center, Kindred Hospital Chicago Central, Vibra Hospital of Corpus Christi, Chesterbrook Academy, and Desert Valley Medical Center.

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