Analyzing Medical Properties Trust (NYSE:MPT) and Sabra Healthcare REIT (NASDAQ:SBRA)

Sabra Healthcare REIT (NASDAQ:SBRA) and Medical Properties Trust (NYSE:MPT) are both mid-cap real estate companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent ratings for Sabra Healthcare REIT and Medical Properties Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sabra Healthcare REIT	0	7	7	0	2.50
Medical Properties Trust	1	1	0	0	1.50

Sabra Healthcare REIT currently has a consensus target price of $22.25, indicating a potential upside of 8.47%. Medical Properties Trust has a consensus target price of $4.50, indicating a potential upside of 11.94%. Given Medical Properties Trust’s higher probable upside, analysts clearly believe Medical Properties Trust is more favorable than Sabra Healthcare REIT.

Dividends

Sabra Healthcare REIT pays an annual dividend of $1.20 per share and has a dividend yield of 5.9%. Medical Properties Trust pays an annual dividend of $0.36 per share and has a dividend yield of 9.0%. Sabra Healthcare REIT pays out 461.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Medical Properties Trust pays out -600.0% of its earnings in the form of a dividend. Medical Properties Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Sabra Healthcare REIT and Medical Properties Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sabra Healthcare REIT	$774.63 million	6.76	$155.61 million	$0.26	78.89
Medical Properties Trust	$972.02 million	2.47	-$277.05 million	($0.06)	-67.00

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

Risk and Volatility

Sabra Healthcare REIT has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500. Comparatively, Medical Properties Trust has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500.

Profitability

This table compares Sabra Healthcare REIT and Medical Properties Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sabra Healthcare REIT	7.61%	2.34%	1.18%
Medical Properties Trust	-2.96%	-0.66%	-0.20%

Insider & Institutional Ownership

99.4% of Sabra Healthcare REIT shares are owned by institutional investors. Comparatively, 71.8% of Medical Properties Trust shares are owned by institutional investors. 1.1% of Sabra Healthcare REIT shares are owned by insiders. Comparatively, 1.8% of Medical Properties Trust shares are owned by 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.

Summary

Sabra Healthcare REIT beats Medical Properties Trust on 10 of the 16 factors compared between the two stocks.

About Sabra Healthcare REIT

Sabra Health Care REIT, Inc. engages in the business of acquiring, financing, and owning real estate property. The company was founded on May 10, 2010 and is headquartered in Tustin, CA.

About Medical Properties Trust

Medical Properties Trust, Inc. is a self-advised real estate investment trust formed to capitalize on the changing trends in healthcare delivery by acquiring and developing net-leased healthcare facilities. MPT’s financing model allows hospitals and other healthcare facilities to unlock the value of their underlying real estate in order to fund facility improvements, technology upgrades, staff additions and new construction. Facilities include acute care hospitals, inpatient rehabilitation hospitals, long-term acute care hospitals, and other medical and surgical facilities.