Host Hotels & Resorts (NASDAQ:HST) vs. Diversified Healthcare Trust (NASDAQ:DHC) Critical Survey

Diversified Healthcare Trust (NASDAQ:DHC) and Host Hotels & Resorts (NASDAQ:HST) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.

Insider and Institutional Ownership

76.0% of Diversified Healthcare Trust shares are owned by institutional investors. Comparatively, 98.5% of Host Hotels & Resorts shares are owned by institutional investors. 10.2% of Diversified Healthcare Trust shares are owned by insiders. Comparatively, 1.5% of Host Hotels & Resorts shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Diversified Healthcare Trust and Host Hotels & Resorts”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Healthcare Trust	$1.52 billion	1.44	-$285.89 million	($1.33)	-6.80
Host Hotels & Resorts	$6.11 billion	2.83	$765.00 million	$1.47	17.18

Host Hotels & Resorts has higher revenue and earnings than Diversified Healthcare Trust. Diversified Healthcare Trust is trading at a lower price-to-earnings ratio than Host Hotels & Resorts, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and target prices for Diversified Healthcare Trust and Host Hotels & Resorts, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diversified Healthcare Trust	1	2	2	1	2.50
Host Hotels & Resorts	0	6	10	1	2.71

Diversified Healthcare Trust currently has a consensus target price of $9.83, indicating a potential upside of 8.72%. Host Hotels & Resorts has a consensus target price of $23.95, indicating a potential downside of 5.17%. Given Diversified Healthcare Trust’s higher probable upside, equities research analysts clearly believe Diversified Healthcare Trust is more favorable than Host Hotels & Resorts.

Risk & Volatility

Diversified Healthcare Trust has a beta of 2.32, indicating that its stock price is 132% more volatile than the S&P 500. Comparatively, Host Hotels & Resorts has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Profitability

This table compares Diversified Healthcare Trust and Host Hotels & Resorts’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diversified Healthcare Trust	-21.10%	-18.75%	-7.09%
Host Hotels & Resorts	16.40%	15.15%	7.75%

Dividends

Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.4%. Host Hotels & Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 3.2%. Diversified Healthcare Trust pays out -3.0% of its earnings in the form of a dividend. Host Hotels & Resorts pays out 54.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Host Hotels & Resorts has increased its dividend for 2 consecutive years. Host Hotels & Resorts is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Host Hotels & Resorts beats Diversified Healthcare Trust on 13 of the 17 factors compared between the two stocks.

About Diversified Healthcare Trust

Diversified Healthcare Trust is a real estate investment trust, which engages in the ownership of senior living communities, medical office buildings, and wellness centers. It operates through the following segments: Office Portfolio, Senior Housing Operating Portfolio (SHOP), and Non-Segment. The Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. The SHOP segment manages senior living communities that offers short term and long term residential care, and other services for residents where it pay fees to the operator to manage the communities for its account. The company was founded on December 16, 1998 and is headquartered in Newton, MA.

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. is a real estate investment trust, which engages in the management of luxury and upper-upscale hotels. It operates through the following geographical segments: United States, Brazil, and Canada. The company was founded in 1927 and is headquartered in Bethesda, MD.