Sabra Healthcare REIT (NASDAQ:SBRA – Get Free Report) and Diversified Healthcare Trust (NASDAQ:DHC – Get Free Report) are both real estate companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.
Dividends
Sabra Healthcare REIT pays an annual dividend of $1.20 per share and has a dividend yield of 5.8%. Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Sabra Healthcare REIT pays out 461.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diversified Healthcare Trust pays out -3.6% of its earnings in the form of a dividend.
Insider & Institutional Ownership
99.4% of Sabra Healthcare REIT shares are owned by institutional investors. Comparatively, 76.0% of Diversified Healthcare Trust shares are owned by institutional investors. 1.1% of Sabra Healthcare REIT shares are owned by insiders. Comparatively, 10.2% of Diversified Healthcare Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Sabra Healthcare REIT | 7.61% | 2.34% | 1.18% |
| Diversified Healthcare Trust | -17.73% | -16.22% | -6.06% |
Analyst Ratings
This is a breakdown of current recommendations and price targets for Sabra Healthcare REIT and Diversified Healthcare Trust, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sabra Healthcare REIT | 0 | 7 | 7 | 0 | 2.50 |
| Diversified Healthcare Trust | 1 | 2 | 2 | 1 | 2.50 |
Sabra Healthcare REIT presently has a consensus target price of $22.25, suggesting a potential upside of 8.38%. Diversified Healthcare Trust has a consensus target price of $9.83, suggesting a potential upside of 21.85%. Given Diversified Healthcare Trust’s higher possible upside, analysts plainly believe Diversified Healthcare Trust is more favorable than Sabra Healthcare REIT.
Earnings & Valuation
This table compares Sabra Healthcare REIT and Diversified Healthcare Trust”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sabra Healthcare REIT | $859.56 million | 6.10 | $155.61 million | $0.26 | 78.96 |
| Diversified Healthcare Trust | $1.50 billion | 1.30 | -$285.89 million | ($1.11) | -7.27 |
Sabra Healthcare REIT has higher earnings, but lower revenue than Diversified Healthcare Trust. Diversified Healthcare Trust is trading at a lower price-to-earnings ratio than Sabra Healthcare REIT, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Sabra Healthcare REIT has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, Diversified Healthcare Trust has a beta of 2.3, meaning that its share price is 130% more volatile than the S&P 500.
Summary
Sabra Healthcare REIT beats Diversified Healthcare Trust on 10 of the 16 factors compared between the two stocks.
About Sabra Healthcare REIT
Sabra Health Care REIT, Inc. engages in the business of acquiring, financing, and owning real estate property. The company was founded on May 10, 2010 and is headquartered in Tustin, CA.
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.
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