Critical Survey: Real Estate Income (NYSE:O) vs. Ventas (NYSE:VTR)

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Real estate income (NYSE: OGet a rating) and Ventas (NYSE: TRVGet a rating) are both large-cap financial companies, but which business is superior? We’ll compare the two companies based on their dividend strength, analyst recommendations, risk, valuation, institutional ownership, earnings and profitability.

Risk and Volatility

Realty Income has a beta of 0.8, suggesting its stock price is 20% less volatile than the S&P 500. Comparatively, Ventas has a beta of 1.17, suggesting its stock price is 17% more volatile than the S&P 500.

Profitability

This table compares the net margins, return on equity and return on assets of Realty Income and Ventas.

Net margins Return on equity return on assets
Real estate income 17.25% 2.32% 1.31%
Sales 1.28% 0.46% 0.20%

Valuation and benefits

This table compares the revenue, earnings per share (EPS), and valuation of Realty Income and Ventas.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
Real estate income $2.08 billion 20.75 $359.46 million $0.94 76.80
Sales $3.83 billion 6.39 $49.01 million $0.14 437.25

Realty Income has higher earnings, but lower earnings than Ventas. Realty Income trades at a lower price-to-earnings ratio than Ventas, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

82.8% of Realty Income shares are held by institutional investors. Comparatively, 92.6% of Ventas shares are held by institutional investors. 0.1% of Realty Income shares are held by insiders of the company. By comparison, 1.3% of Ventas shares are held by insiders of the company. Strong institutional ownership indicates that large money managers, endowments, and hedge funds believe a company will outperform the market over the long term.

Dividends

Realty Income pays an annual dividend of $2.96 per share and has a dividend yield of 4.1%. Ventas pays an annual dividend of $1.80 per share and has a dividend yield of 2.9%. Realty Income pays out 314.9% of its earnings as a dividend, suggesting it may not have enough earnings to cover its dividend payment in the future. Ventas pays out 1,285.8% of its earnings as a dividend, suggesting that it may not have enough earnings to cover its dividend payment in the future. Realty Income has increased its dividend for 28 consecutive years. Realty Income is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for Realty Income and Ventas, as reported by MarketBeat.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Real estate income 0 3 5 0 2.63
Sales 0 5 ten 1 2.75

Realty Income currently has a consensus price target of $77.80, suggesting a potential upside of 7.77%. Ventas has a consensus price target of $62.90, suggesting a potential upside of 2.76%. Given Realty Income’s likely higher upside, research analysts clearly believe that Realty Income is more favorable than Ventas.

Summary

Realty Income beats Ventas on 10 out of 18 factors compared between the two stocks.

Real Estate Income Company Profile (Get a rating)

Realty Income, The Monthly Dividend Company, is an S&P 500 company dedicated to providing shareholders with reliable monthly income. The company is structured as a REIT and its monthly dividends are supported by cash flow from over 6,500 real estate properties held under long-term lease agreements with our commercial customers. To date, the company has declared 608 consecutive monthly common stock dividends in its 52 years of operation and has increased the dividend 109 times since Realty Income’s IPO in 1994 (NYSE:O). The company is a member of the S&P 500 Dividend Aristocrats Index. Additional information about the Company may be obtained on the Company’s website at www.realty income.com.

Ventas Company Profile (Get a rating)

Ventas, an S&P 500 company, operates at the intersection of two powerful and dynamic industries: healthcare and real estate. As one of the world’s largest real estate investment trusts (REITs), we use the power of capital to unlock the value of real estate, in partnership with leading healthcare providers, developers, institutions research and medical organizations, innovators and health care organizations whose success is supported by the favorable demographic winds of an aging population. For more than twenty years, Ventas has followed a successful strategy that endures: combining a diverse, high-quality portfolio of properties and sources of capital to manage across cycles, working with industry-leading partners and a collaborative team and experience focused on producing a constantly growing cash flow. superior flows and returns on a strong balance sheet, ultimately rewarding Ventas shareholders. As of September 30, 2020, Ventas owned or managed through unconsolidated joint ventures approximately 1,200 properties.



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