Head-To-Head Review: MedEquities Realty Trust (MRT) & Physicians Realty Trust (DOC)

MedEquities Realty Trust (NYSE: MRT) and Physicians Realty Trust (NYSE:DOC) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitability, risk and analyst recommendations.

Valuation and Earnings

This table compares MedEquities Realty Trust and Physicians Realty Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MedEquities Realty Trust $56.96 million 6.62 $46.67 million $0.35 33.94
Physicians Realty Trust $296.22 million 9.39 $195.49 million $0.23 76.83

Physicians Realty Trust has higher revenue and earnings than MedEquities Realty Trust. MedEquities Realty Trust 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.

Analyst Ratings

This is a breakdown of current ratings for MedEquities Realty Trust and Physicians Realty Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MedEquities Realty Trust 1 1 6 0 2.63
Physicians Realty Trust 0 4 9 0 2.69

MedEquities Realty Trust presently has a consensus price target of $13.00, suggesting a potential upside of 9.43%. Physicians Realty Trust has a consensus price target of $20.54, suggesting a potential upside of 16.25%. Given Physicians Realty Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Physicians Realty Trust is more favorable than MedEquities Realty Trust.

Profitability

This table compares MedEquities Realty Trust and Physicians Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MedEquities Realty Trust 32.68% 5.58% 3.52%
Physicians Realty Trust 11.51% 1.75% 1.10%

Insider & Institutional Ownership

92.9% of MedEquities Realty Trust shares are held by institutional investors. Comparatively, 94.2% of Physicians Realty Trust shares are held by institutional investors. 2.5% of MedEquities Realty Trust shares are held by insiders. Comparatively, 0.5% of Physicians Realty Trust shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

MedEquities Realty Trust pays an annual dividend of $0.84 per share and has a dividend yield of 7.1%. Physicians Realty Trust pays an annual dividend of $0.92 per share and has a dividend yield of 5.2%. MedEquities Realty Trust pays out 240.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Physicians Realty Trust pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MedEquities Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Physicians Realty Trust beats MedEquities Realty Trust on 8 of the 15 factors compared between the two stocks.

MedEquities Realty Trust Company Profile

MedEquities Realty Trust, Inc. is a real estate investment trust (REIT). The Company invests in a diversified mix of healthcare properties and healthcare-related real estate debt investments. The Company invests primarily in real estate across the acute and post-acute spectrum of care. It focuses on investing in various types of healthcare properties, including acute care hospitals; skilled nursing facilities; short-stay surgical and specialty hospitals, which focus on orthopedic, heart and other dedicated surgeries and specialty procedures; dedicated specialty hospitals, such as inpatient rehabilitation facilities, long-term acute care hospitals and facilities providing psychiatric care; physician clinics; diagnostic facilities; outpatient surgery centers, and facilities that support these services, such as medical office buildings. As of September 30, 2016, the Company’s portfolio included 24 healthcare facilities and one healthcare-related debt investment.

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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