Ventas (NYSE:VTR) versus Diversified Healthcare Trust (NASDAQ:DHC) Financial Analysis
by Mitch Edgeman · The Markets DailyDiversified Healthcare Trust (NASDAQ:DHC – Get Free Report) and Ventas (NYSE:VTR – Get Free Report) are both real estate companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.
Earnings and Valuation
This table compares Diversified Healthcare Trust and Ventas”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Diversified Healthcare Trust | $1.48 billion | 1.15 | -$285.89 million | ($0.64) | -10.97 |
| Ventas | $5.83 billion | 8.04 | $251.38 million | $0.53 | 167.34 |
Ventas has higher revenue and earnings than Diversified Healthcare Trust. Diversified Healthcare Trust is trading at a lower price-to-earnings ratio than Ventas, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent recommendations for Diversified Healthcare Trust and Ventas, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Diversified Healthcare Trust | 1 | 2 | 2 | 2 | 2.71 |
| Ventas | 0 | 4 | 17 | 0 | 2.81 |
Diversified Healthcare Trust presently has a consensus target price of $9.83, suggesting a potential upside of 40.08%. Ventas has a consensus target price of $99.41, suggesting a potential upside of 12.08%. Given Diversified Healthcare Trust’s higher possible upside, equities analysts plainly believe Diversified Healthcare Trust is more favorable than Ventas.
Dividends
Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.6%. Ventas pays an annual dividend of $2.08 per share and has a dividend yield of 2.3%. Diversified Healthcare Trust pays out -6.2% of its earnings in the form of a dividend. Ventas pays out 392.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ventas has increased its dividend for 1 consecutive years. Ventas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
76.0% of Diversified Healthcare Trust shares are held by institutional investors. Comparatively, 94.2% of Ventas shares are held by institutional investors. 10.2% of Diversified Healthcare Trust shares are held by company insiders. Comparatively, 0.5% of Ventas shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Risk & Volatility
Diversified Healthcare Trust has a beta of 2.34, suggesting that its stock price is 134% more volatile than the S&P 500. Comparatively, Ventas has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.
Profitability
This table compares Diversified Healthcare Trust and Ventas’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Diversified Healthcare Trust | -10.29% | -9.51% | -3.57% |
| Ventas | 3.86% | 1.86% | 0.91% |
Summary
Ventas beats Diversified Healthcare Trust on 13 of the 18 factors compared between the two stocks.
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.
About Ventas
Ventas Inc. (NYSE: VTR) is a leading S&P 500 real estate investment trust focused on delivering strong, sustainable shareholder returns by enabling exceptional environments that benefit a large and growing aging population. The Company's growth is fueled by its senior housing communities, which provide valuable services to residents and enable them to thrive in supported environments. Ventas leverages its unmatched operational expertise, data-driven insights from its Ventas Operational InsightsTM platform, extensive relationships and strong financial position to achieve its goal of delivering outsized performance across approximately 1,400 properties. The Ventas portfolio is composed of senior housing communities, outpatient medical buildings, research centers and healthcare facilities in North America and the United Kingdom. The Company benefits from a seasoned team of talented professionals who share a commitment to excellence, integrity and a common purpose of helping people live longer, healthier, happier lives.