Analyzing Welltower (NYSE:WELL) and Omega Healthcare Investors (NYSE:OHI)

Welltower (NYSE:WELL) and Omega Healthcare Investors (NYSE:OHI) are both large-cap real estate companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Analyst Ratings

This is a summary of current ratings and price targets for Welltower and Omega Healthcare Investors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Welltower	0	3	15	2	2.95
Omega Healthcare Investors	2	7	7	0	2.31

Welltower currently has a consensus price target of $255.86, suggesting a potential upside of 7.80%. Omega Healthcare Investors has a consensus price target of $49.93, suggesting a potential upside of 7.99%. Given Omega Healthcare Investors’ higher probable upside, analysts plainly believe Omega Healthcare Investors is more favorable than Welltower.

Insider and Institutional Ownership

94.8% of Welltower shares are held by institutional investors. Comparatively, 65.2% of Omega Healthcare Investors shares are held by institutional investors. 0.4% of Welltower shares are held by company insiders. Comparatively, 1.7% of Omega Healthcare Investors shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Welltower pays an annual dividend of $3.40 per share and has a dividend yield of 1.4%. Omega Healthcare Investors pays an annual dividend of $2.72 per share and has a dividend yield of 5.9%. Welltower pays out 156.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Omega Healthcare Investors pays out 97.1% 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 increased its dividend for 2 consecutive years. Omega Healthcare Investors is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Welltower and Omega Healthcare Investors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Welltower	12.15%	3.56%	2.35%
Omega Healthcare Investors	66.96%	15.76%	8.40%

Risk & Volatility

Welltower has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, Omega Healthcare Investors has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.

Earnings & Valuation

This table compares Welltower and Omega Healthcare Investors”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Welltower	$10.84 billion	15.78	$936.84 million	$2.18	108.87
Omega Healthcare Investors	$1.19 billion	11.77	$572.03 million	$2.80	16.51

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

Summary

Welltower beats Omega Healthcare Investors on 10 of the 18 factors compared between the two stocks.

About Welltower

Welltower Inc. (NYSE:WELL), a real estate investment trust (“REIT”) and S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. Welltower invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.

About Omega Healthcare Investors

Omega Healthcare Investors, Inc. engages in the provision of financing and capital to the long-term healthcare industry with a particular focus on skilled nursing facilities, assisted living facilities, independent living facilities, rehabilitation and acute care facilities, and medical office buildings. The company was founded on March 31, 1992 and is headquartered in Hunt Valley, MD.