National Health Investors (NYSE: NHI) 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 analyst recommendations, earnings, risk, valuation, profitabiliy, institutional ownership and dividends.
Volatility and Risk
National Health Investors has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, Physicians Realty Trust has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500.
Institutional and Insider Ownership
69.6% of National Health Investors shares are held by institutional investors. Comparatively, 79.9% of Physicians Realty Trust shares are held by institutional investors. 5.2% of National Health Investors shares are held by company insiders. Comparatively, 0.5% of Physicians Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a summary of current ratings for National Health Investors and Physicians Realty Trust, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| National Health Investors | 1 | 3 | 2 | 0 | 2.17 |
| Physicians Realty Trust | 1 | 3 | 12 | 0 | 2.69 |
National Health Investors currently has a consensus target price of $78.80, indicating a potential upside of 2.71%. Physicians Realty Trust has a consensus target price of $21.00, indicating a potential upside of 13.57%. Given Physicians Realty Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Physicians Realty Trust is more favorable than National Health Investors.
Profitability
This table compares National Health Investors and Physicians Realty Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| National Health Investors | 63.72% | 13.36% | 6.76% |
| Physicians Realty Trust | 11.42% | 1.68% | 1.11% |
Valuation and Earnings
This table compares National Health Investors and Physicians Realty Trust’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| National Health Investors | $255.06 million | 12.33 | $233.77 million | $4.12 | 18.62 |
| Physicians Realty Trust | $272.80 million | 10.39 | $180.00 million | $0.22 | 84.05 |
National Health Investors has higher revenue, but lower earnings than Physicians Realty Trust. National Health Investors 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.
Dividends
National Health Investors pays an annual dividend of $3.80 per share and has a dividend yield of 5.0%. Physicians Realty Trust pays an annual dividend of $0.92 per share and has a dividend yield of 5.0%. National Health Investors pays out 92.2% 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 418.2% 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 has raised its dividend for 7 consecutive years. Physicians Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Physicians Realty Trust beats National Health Investors on 9 of the 17 factors compared between the two stocks.
National Health Investors Company Profile
National Health Investors, Inc. is a self-managed real estate investment trust (REIT) specializing in sale-leaseback, joint-venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical investments. The Company is engaged in the business of owning and financing healthcare properties. Its portfolio consists of lease, mortgage and other note investments in independent living facilities, assisted living facilities, entrance-fee communities, senior living campuses, skilled nursing facilities, specialty hospitals and medical office buildings. Its other investments include marketable securities and a joint venture structured to comply with the provisions of the REIT Investment Diversification Empowerment Act of 2007 (RIDEA) through which it invests in facility operations managed by an independent third party. As of December 31, 2016, it had investments in real estate, mortgage and other notes receivable involving 205 facilities located in 32 states.
Physicians Realty Trust Company Profile
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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