Diversified Healthcare Trust (NASDAQ:DHC) and Omega Healthcare Investors (NYSE:OHI) Critical Contrast

Diversified Healthcare Trust (NASDAQ:DHC) and Omega Healthcare Investors (NYSE:OHI) are both real estate companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, profitability, dividends, earnings, valuation and institutional ownership.

Profitability

This table compares Diversified Healthcare Trust and Omega Healthcare Investors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diversified Healthcare Trust	-10.29%	-9.37%	-3.55%
Omega Healthcare Investors	66.96%	15.76%	8.40%

Analyst Ratings

This is a summary of recent ratings and target prices for Diversified Healthcare Trust and Omega Healthcare Investors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diversified Healthcare Trust	1	2	2	1	2.50
Omega Healthcare Investors	2	7	7	0	2.31

Diversified Healthcare Trust presently has a consensus target price of $9.83, indicating a potential upside of 30.24%. Omega Healthcare Investors has a consensus target price of $49.93, indicating a potential upside of 4.90%. Given Diversified Healthcare Trust’s stronger consensus rating and higher possible upside, equities analysts plainly believe Diversified Healthcare Trust is more favorable than Omega Healthcare Investors.

Earnings and Valuation

This table compares Diversified Healthcare Trust and Omega Healthcare Investors”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Healthcare Trust	$1.54 billion	1.19	-$285.89 million	($1.11)	-6.80
Omega Healthcare Investors	$1.19 billion	12.12	$572.03 million	$2.80	17.00

Omega Healthcare Investors has lower revenue, but higher earnings than Diversified Healthcare Trust. Diversified Healthcare Trust is trading at a lower price-to-earnings ratio than Omega Healthcare Investors, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

76.0% of Diversified Healthcare Trust shares are held by institutional investors. Comparatively, 65.2% of Omega Healthcare Investors shares are held by institutional investors. 10.2% of Diversified Healthcare Trust shares are held by insiders. Comparatively, 1.7% of Omega Healthcare Investors shares are held 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.

Dividends

Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Omega Healthcare Investors pays an annual dividend of $2.72 per share and has a dividend yield of 5.7%. Diversified Healthcare Trust pays out -3.6% of its earnings in the form of a dividend. Omega Healthcare Investors pays out 97.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

Diversified Healthcare Trust has a beta of 2.34, indicating that its share price is 134% more volatile than the S&P 500. Comparatively, Omega Healthcare Investors has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Summary

Diversified Healthcare Trust beats Omega Healthcare Investors on 9 of the 17 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 Omega Healthcare Investors

Omega Healthcare Investors, Inc. engages in the provision of financing and capital to the long-term healthcare industry with a particular focus on skilled nursing facilities, assisted living facilities, independent living facilities, rehabilitation and acute care facilities, and medical office buildings. The company was founded on March 31, 1992 and is headquartered in Hunt Valley, MD.