Medical Properties Trust (MPW) versus Omega Healthcare Investors (OHI) Financial Contrast

Medical Properties Trust (NYSE: MPW) and Omega Healthcare Investors (NYSE:OHI) are both mid-cap financials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Dividends

Medical Properties Trust pays an annual dividend of $0.96 per share and has a dividend yield of 6.9%. Omega Healthcare Investors pays an annual dividend of $2.60 per share and has a dividend yield of 9.2%. Medical Properties Trust pays out 126.3% 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 317.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Medical Properties Trust has increased its dividend for 3 consecutive years and Omega Healthcare Investors has increased its dividend for 7 consecutive years. Omega Healthcare Investors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Medical Properties Trust 39.95% 7.36% 3.54%
Omega Healthcare Investors 17.61% 3.92% 1.82%

Valuation & Earnings

This table compares Medical Properties Trust and Omega Healthcare Investors’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Medical Properties Trust $541.14 million 9.41 $225.04 million $0.76 18.41
Omega Healthcare Investors $900.83 million 6.20 $366.41 million $0.82 34.39

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

Institutional and Insider Ownership

81.4% of Medical Properties Trust shares are owned by institutional investors. Comparatively, 68.1% of Omega Healthcare Investors shares are owned by institutional investors. 1.0% of Medical Properties Trust shares are owned by company insiders. Comparatively, 1.5% of Omega Healthcare Investors shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Medical Properties Trust has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, Omega Healthcare Investors has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Medical Properties Trust and Omega Healthcare Investors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medical Properties Trust 0 5 6 0 2.55
Omega Healthcare Investors 0 4 1 0 2.20

Medical Properties Trust presently has a consensus target price of $14.25, indicating a potential upside of 1.86%. Omega Healthcare Investors has a consensus target price of $30.75, indicating a potential upside of 9.04%. Given Omega Healthcare Investors’ higher probable upside, analysts plainly believe Omega Healthcare Investors is more favorable than Medical Properties Trust.

Summary

Medical Properties Trust beats Omega Healthcare Investors on 10 of the 17 factors compared between the two stocks.

Medical Properties Trust Company Profile

Medical Properties Trust, Inc. is a real estate investment trust (REIT). The Company focuses on investing in and owning net-leased healthcare facilities across the United States and selectively in foreign jurisdictions. The Company’s segment is its investments in healthcare real estate, including mortgage and other loans, as well as any equity investments in its tenants. The Company conducts its operations through MPT Operating Partnership, L.P. The Company acquires and develops healthcare facilities, and leases the facilities to healthcare operating companies under long-term net leases. The Company makes mortgage loans to healthcare operators collateralized by their real estate assets. As of February 24, 2017, the Company’s portfolio consisted of 232 properties, including 215 facilities (of the 220 facilities that it owns) were leased to 30 tenants, five were under development, and the remaining assets were in the form of mortgage loans to four operators.

Omega Healthcare Investors Company Profile

Omega Healthcare Investors, Inc. is a self-administered real estate investment trust (REIT). The Company maintains a portfolio of long-term healthcare facilities and mortgages on healthcare facilities located in the United States and the United Kingdom. It operates through the segment, which consists of investments in healthcare-related real estate properties. It provides lease or mortgage financing to qualified operators of skilled nursing facilities (SNFs) and assisted living facilities (ALFs), independent living facilities, rehabilitation and acute care facilities. Its portfolio consists of long-term leases and mortgage agreements. As of December 31, 2016, its portfolio of investments included 996 healthcare facilities located in 42 states and the United Kingdom and operated by 79 third-party operators. As of December 31, 2016, the Company’s portfolio consisted of 809 SNFs, 101 ALFs, 16 specialty facilities, one medical office building, fixed rate mortgages on 44 SNFs and two ALFs.

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