Analyzing Alexander’s (NYSE:ALX) and CareTrust REIT (NYSE:CTRE)

CareTrust REIT (NYSE:CTRE) and Alexander’s (NYSE:ALX) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, institutional ownership, profitability, valuation and earnings.

Dividends

CareTrust REIT pays an annual dividend of $1.34 per share and has a dividend yield of 3.3%. Alexander’s pays an annual dividend of $18.00 per share and has a dividend yield of 7.7%. CareTrust REIT pays out 86.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexander’s pays out 327.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexander’s has raised its dividend for 1 consecutive years. Alexander’s is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

CareTrust REIT has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, Alexander’s has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500.

Profitability

This table compares CareTrust REIT and Alexander’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CareTrust REIT	67.28%	8.98%	6.83%
Alexander’s	13.24%	20.68%	2.23%

Valuation & Earnings

This table compares CareTrust REIT and Alexander’s”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CareTrust REIT	$476.39 million	18.78	$320.54 million	$1.55	25.83
Alexander’s	$213.18 million	5.62	$28.22 million	$5.49	42.73

CareTrust REIT has higher revenue and earnings than Alexander’s. CareTrust REIT is trading at a lower price-to-earnings ratio than Alexander’s, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for CareTrust REIT and Alexander’s, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CareTrust REIT	0	1	1	3	3.40
Alexander’s	0	1	0	1	3.00

CareTrust REIT currently has a consensus target price of $43.00, indicating a potential upside of 7.39%. Given CareTrust REIT’s stronger consensus rating and higher possible upside, analysts plainly believe CareTrust REIT is more favorable than Alexander’s.

Insider & Institutional Ownership

87.8% of CareTrust REIT shares are held by institutional investors. Comparatively, 32.0% of Alexander’s shares are held by institutional investors. 0.5% of CareTrust REIT shares are held by company insiders. Comparatively, 26.3% of Alexander’s shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

CareTrust REIT beats Alexander’s on 11 of the 18 factors compared between the two stocks.

About CareTrust REIT

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States.

About Alexander’s

Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (REIT), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties. All references to we, us, our, Company and Alexander’s refer to Alexander’s, Inc. and its consolidated subsidiaries. We are managed by, and our properties are leased and developed by, Vornado Realty Trust (Vornado) (NYSE: VNO). We have five properties in New York City.