Analyzing CareTrust REIT (CTRE) and The Competition

CareTrust REIT (NYSE:CTRE) is one of 111 publicly-traded companies in the “REIT – EQTY TRUST – OTHER” industry, but how does it weigh in compared to its peers? We will compare CareTrust REIT to similar companies based on the strength of its valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Institutional and Insider Ownership

87.8% of CareTrust REIT shares are owned by institutional investors. Comparatively, 75.9% of shares of all “REIT – EQTY TRUST – OTHER” companies are owned by institutional investors. 0.5% of CareTrust REIT shares are owned by insiders. Comparatively, 5.9% of shares of all “REIT – EQTY TRUST – OTHER” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for CareTrust REIT and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CareTrust REIT	0	1	1	0	2.50
CareTrust REIT Competitors	1893	7164	7799	239	2.37

As a group, “REIT – EQTY TRUST – OTHER” companies have a potential upside of 12.58%. Given CareTrust REIT’s peers higher probable upside, analysts clearly believe CareTrust REIT has less favorable growth aspects than its peers.

Valuation and Earnings

This table compares CareTrust REIT and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
CareTrust REIT	$296.29 million	$125.08 million	28.62
CareTrust REIT Competitors	$1.50 billion	$127.62 million	90.89

CareTrust REIT’s peers have higher revenue and earnings than CareTrust REIT. CareTrust REIT is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares CareTrust REIT and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CareTrust REIT	58.90%	7.60%	5.90%
CareTrust REIT Competitors	-1.08%	-3.69%	0.82%

Volatility and Risk

CareTrust REIT has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, CareTrust REIT’s peers have a beta of 1.19, indicating that their average stock price is 19% more volatile than the S&P 500.

Dividends

CareTrust REIT pays an annual dividend of $1.34 per share and has a dividend yield of 3.9%. CareTrust REIT pays out 111.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “REIT – EQTY TRUST – OTHER” companies pay a dividend yield of 4.8% and pay out -59.7% of their earnings in the form of a dividend. CareTrust REIT lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

CareTrust REIT peers beat CareTrust REIT on 9 of the 15 factors compared.

CareTrust REIT Company Profile

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.