Analyzing CareTrust REIT (NYSE:CTRE) & SL Green Realty (NYSE:SLG)
by Sarita Garza · The Markets DailyCareTrust REIT (NYSE:CTRE – Get Free Report) and SL Green Realty (NYSE:SLG – Get Free Report) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.
Profitability
This table compares CareTrust REIT and SL Green Realty’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CareTrust REIT | 67.28% | 8.98% | 6.83% |
| SL Green Realty | -9.66% | -2.44% | -0.86% |
Dividends
CareTrust REIT pays an annual dividend of $1.34 per share and has a dividend yield of 3.5%. SL Green Realty pays an annual dividend of $2.47 per share and has a dividend yield of 6.9%. CareTrust REIT pays out 86.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SL Green Realty pays out -153.4% of its earnings in the form of a dividend. CareTrust REIT has increased its dividend for 3 consecutive years and SL Green Realty has increased its dividend for 1 consecutive years. SL Green Realty is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for CareTrust REIT and SL Green Realty, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CareTrust REIT | 1 | 1 | 8 | 3 | 3.00 |
| SL Green Realty | 2 | 9 | 8 | 0 | 2.32 |
CareTrust REIT presently has a consensus price target of $42.82, suggesting a potential upside of 11.72%. SL Green Realty has a consensus price target of $51.45, suggesting a potential upside of 42.71%. Given SL Green Realty’s higher possible upside, analysts clearly believe SL Green Realty is more favorable than CareTrust REIT.
Insider and Institutional Ownership
87.8% of CareTrust REIT shares are held by institutional investors. Comparatively, 90.0% of SL Green Realty shares are held by institutional investors. 0.7% of CareTrust REIT shares are held by company insiders. Comparatively, 5.0% of SL Green Realty shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk and Volatility
CareTrust REIT has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, SL Green Realty has a beta of 1.61, indicating that its share price is 61% more volatile than the S&P 500.
Earnings and Valuation
This table compares CareTrust REIT and SL Green Realty”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| CareTrust REIT | $476.39 million | 17.96 | $320.54 million | $1.55 | 24.73 |
| SL Green Realty | $1.00 billion | 2.56 | -$88.28 million | ($1.61) | -22.39 |
CareTrust REIT has higher earnings, but lower revenue than SL Green Realty. SL Green Realty is trading at a lower price-to-earnings ratio than CareTrust REIT, indicating that it is currently the more affordable of the two stocks.
Summary
CareTrust REIT beats SL Green Realty on 10 of the 17 factors compared between the two stocks.
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.
About SL Green Realty
3SL Green Realty Corp., Manhattan’s largest office landlord, is a fully integrated real estate investment trust, or REIT, that is focused primarily on acquiring, managing and maximizing value of Manhattan commercial properties. As of June 30, 2022, SL Green held interests in 64 buildings totaling 34.4 million square feet. This included ownership interests in 26.3 million square feet of Manhattan buildings and 7.2 million square feet securing debt and preferred equity investments.