Sabra Health Care REIT (NASDAQ:SBRA) and Eastgroup Properties (NYSE:EGP) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Institutional & Insider Ownership

88.5% of Sabra Health Care REIT shares are owned by institutional investors. Comparatively, 92.6% of Eastgroup Properties shares are owned by institutional investors. 1.2% of Sabra Health Care REIT shares are owned by insiders. Comparatively, 2.0% of Eastgroup Properties shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Sabra Health Care REIT and Eastgroup Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sabra Health Care REIT 26.98% 5.42% 2.99%
Eastgroup Properties 35.88% 10.83% 4.96%

Volatility and Risk

Sabra Health Care REIT has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500. Comparatively, Eastgroup Properties has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Sabra Health Care REIT and Eastgroup Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sabra Health Care REIT 1 4 3 0 2.25
Eastgroup Properties 0 5 2 0 2.29

Sabra Health Care REIT presently has a consensus price target of $18.21, suggesting a potential upside of 55.68%. Eastgroup Properties has a consensus price target of $123.43, suggesting a potential upside of 25.73%. Given Sabra Health Care REIT’s higher probable upside, analysts plainly believe Sabra Health Care REIT is more favorable than Eastgroup Properties.

Dividends

Sabra Health Care REIT pays an annual dividend of $1.80 per share and has a dividend yield of 15.4%. Eastgroup Properties pays an annual dividend of $3.00 per share and has a dividend yield of 3.1%. Sabra Health Care REIT pays out 96.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eastgroup Properties pays out 60.2% of its earnings in the form of a dividend. Sabra Health Care REIT has increased its dividend for 8 consecutive years and Eastgroup Properties has increased its dividend for 8 consecutive years.

Earnings and Valuation

This table compares Sabra Health Care REIT and Eastgroup Properties’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sabra Health Care REIT $661.74 million 3.63 $69.00 million $1.86 6.29
Eastgroup Properties $331.39 million 11.57 $121.66 million $4.98 19.71

Eastgroup Properties has lower revenue, but higher earnings than Sabra Health Care REIT. Sabra Health Care REIT is trading at a lower price-to-earnings ratio than Eastgroup Properties, indicating that it is currently the more affordable of the two stocks.

Summary

Eastgroup Properties beats Sabra Health Care REIT on 11 of the 16 factors compared between the two stocks.

Sabra Health Care REIT Company Profile

As of December 31, 2018, Sabra's investment portfolio included 470 real estate properties held for investment (consisting of (i) 335 Skilled Nursing/Transitional Care facilities, (ii) 90 Senior Housing communities (“Senior Housing – Leased”), (iii) 23 Senior Housing communities operated by third-party property managers pursuant to property management agreements (“Senior Housing – Managed”) and (iv) 22 Specialty Hospitals and Other facilities), one investment in a direct financing lease, 22 investments in loans receivable (consisting of (i) one mortgage loan, (ii) two construction loans, (iii) one mezzanine loan and (iv) 18 other loans), nine preferred equity investments and one investment in an unconsolidated joint venture that owns 172 Senior Housing – Managed communities. As of December 31, 2018, Sabra's real estate properties held for investment included 47,648 beds/units and its unconsolidated joint venture included 7,652 beds/units, spread across the United States and Canada.

Eastgroup Properties Company Profile

EastGroup Properties, Inc. is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company's goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 15,000 to 50,000 square foot range). The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. EastGroup's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 41.7 million square feet.

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