Critical Survey: Welltower (NYSE:WELL) versus National Healthcare Properties (NASDAQ:NHP)
by Sarita Garza · The Markets DailyWelltower (NYSE:WELL – Get Free Report) and National Healthcare Properties (NASDAQ:NHP – Get Free Report) are both real estate companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.
Institutional and Insider Ownership
94.8% of Welltower shares are held by institutional investors. 0.4% of Welltower shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Welltower and National Healthcare Properties”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Welltower | $10.84 billion | 15.12 | $936.84 million | $2.18 | 104.27 |
| National Healthcare Properties | $342.28 million | 3.44 | -$57.62 million | ($0.13) | -124.15 |
Welltower has higher revenue and earnings than National Healthcare Properties. National Healthcare Properties is trading at a lower price-to-earnings ratio than Welltower, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current ratings for Welltower and National Healthcare Properties, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Welltower | 0 | 4 | 14 | 2 | 2.90 |
| National Healthcare Properties | 1 | 5 | 6 | 0 | 2.42 |
Welltower presently has a consensus price target of $255.91, indicating a potential upside of 12.59%. National Healthcare Properties has a consensus price target of $18.22, indicating a potential upside of 12.90%. Given National Healthcare Properties’ higher probable upside, analysts plainly believe National Healthcare Properties is more favorable than Welltower.
Dividends
Welltower pays an annual dividend of $3.40 per share and has a dividend yield of 1.5%. National Healthcare Properties pays an annual dividend of $0.30 per share and has a dividend yield of 1.9%. Welltower pays out 156.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National Healthcare Properties pays out -230.8% of its earnings in the form of a dividend. Welltower has increased its dividend for 2 consecutive years. National Healthcare Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Welltower and National Healthcare Properties’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Welltower | 12.15% | 3.56% | 2.35% |
| National Healthcare Properties | -13.04% | -6.22% | -2.52% |
Summary
Welltower beats National Healthcare Properties on 14 of the 17 factors compared between the two stocks.
About Welltower
Welltower Inc. (NYSE:WELL), a real estate investment trust (“REIT”) and S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. Welltower invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.
About National Healthcare Properties
National Healthcare Properties Inc. is a self-managed real estate investment trust focused on acquiring, owning and investing in a diversified portfolio of healthcare real estate, with an emphasis on providing senior housing. National Healthcare Properties Inc. is based in NEW YORK.