Head-To-Head Review: Omega Healthcare Investors (NYSE:OHI) and CareTrust REIT (NYSE:CTRE)

Omega Healthcare Investors (NYSE:OHI) and CareTrust REIT (NYSE:CTRE) are both real estate companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

65.2% of Omega Healthcare Investors shares are held by institutional investors. Comparatively, 87.8% of CareTrust REIT shares are held by institutional investors. 1.7% of Omega Healthcare Investors shares are held by company insiders. Comparatively, 0.7% of CareTrust REIT shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Omega Healthcare Investors	$1.28 billion	10.90	$848.44 million	$2.80	16.47
CareTrust REIT	$452.64 million	18.86	$375.71 million	$1.59	22.72

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Omega Healthcare Investors	N/A	N/A	N/A
CareTrust REIT	N/A	N/A	N/A

Risk & Volatility

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

Dividends

Omega Healthcare Investors pays an annual dividend of $2.72 per share and has a dividend yield of 5.9%. CareTrust REIT pays an annual dividend of $1.56 per share and has a dividend yield of 4.3%. 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. CareTrust REIT pays out 98.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CareTrust REIT has increased its dividend for 3 consecutive years. Omega Healthcare Investors is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Omega Healthcare Investors	2	7	7	0	2.31
CareTrust REIT	0	4	10	1	2.80

Omega Healthcare Investors presently has a consensus price target of $49.93, indicating a potential upside of 8.28%. CareTrust REIT has a consensus price target of $43.64, indicating a potential upside of 20.83%. Given CareTrust REIT’s stronger consensus rating and higher possible upside, analysts plainly believe CareTrust REIT is more favorable than Omega Healthcare Investors.

Summary

CareTrust REIT beats Omega Healthcare Investors on 9 of the 15 factors compared between the two stocks.

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.

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.