Analyzing Physicians Realty Trust (DOC) and Ventas (VTR)
Ventas (NYSE: VTR) and Physicians Realty Trust (NYSE:DOC) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, dividends, institutional ownership, profitabiliy, valuation and analyst recommendations.
This table compares Ventas and Physicians Realty Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Physicians Realty Trust||11.42%||1.68%||1.11%|
Insider and Institutional Ownership
91.3% of Ventas shares are owned by institutional investors. Comparatively, 92.8% of Physicians Realty Trust shares are owned by institutional investors. 1.3% of Ventas shares are owned by insiders. Comparatively, 0.5% of Physicians Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares Ventas and Physicians Realty Trust’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ventas||$3.48 billion||7.09||$1.85 billion||$1.97||35.29|
|Physicians Realty Trust||$272.80 million||11.92||$180.01 million||$0.22||96.46|
Ventas has higher revenue and earnings than Physicians Realty Trust. Ventas is trading at a lower price-to-earnings ratio than Physicians Realty Trust, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and price targets for Ventas and Physicians Realty Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Physicians Realty Trust||0||4||10||1||2.80|
Ventas currently has a consensus price target of $63.71, indicating a potential downside of 8.35%. Physicians Realty Trust has a consensus price target of $21.75, indicating a potential upside of 2.50%. Given Physicians Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Physicians Realty Trust is more favorable than Ventas.
Ventas pays an annual dividend of $3.10 per share and has a dividend yield of 4.5%. Physicians Realty Trust pays an annual dividend of $0.90 per share and has a dividend yield of 4.2%. Ventas pays out 157.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Physicians Realty Trust pays out 409.1% 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 6 consecutive years. Ventas is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Ventas has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500. Comparatively, Physicians Realty Trust has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.
Ventas beats Physicians Realty Trust on 10 of the 18 factors compared between the two stocks.
Ventas, Inc. is a real estate investment trust (REIT) with its properties located throughout the United States, Canada and the United Kingdom. The Company operates through three segments: triple-net leased properties, senior living operations and office operations. Under its triple-net leased properties segment, the Company invests in and owns seniors housing and healthcare properties throughout the United States and the United Kingdom and leases those properties to healthcare operating companies under triple-net or absolute-net leases that obligate the tenants to pay all property-related expenses. In its senior living operations segment, it invests in seniors housing communities throughout the United States and Canada and engages independent operators to manage those communities. In its office operations segment, the Company primarily acquires, owns, develops, leases and manages medical office buildings (MOBs) and life science and innovation centers throughout the United States.
About Physicians Realty Trust
Physicians Realty Trust (the Trust) is a real estate investment trust. Physicians Realty L.P. is the operating partnership of the Trust. The Trust and its operating partnership are engaged in acquiring, developing, owning and managing healthcare properties that are leased to physicians, hospitals and healthcare delivery systems. As of December 31, 2016, the Company’s portfolio consisted of 246 properties located in 29 states with approximately 10,883,601 net leasable square feet. The Company invests in real estate that is integral to providing healthcare services. The Company focuses its investment activity on various types of healthcare properties, such as medical office buildings; outpatient treatment and diagnostic facilities; physician group practice clinics; ambulatory surgery centers, and specialty hospitals and treatment centers. Its properties include Arrowhead Commons, Aurora Medical Office Building, Decatur Medical Office Building and El Paso Medical Office Building.
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