Critical Contrast: Starwood Property Trust (NYSE:STWD) and Selectis Health (OTCMKTS:GBCS)

Starwood Property Trust (NYSE:STWD) and Selectis Health (OTCMKTS:GBCS) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.

Valuation & Earnings

This table compares Starwood Property Trust and Selectis Health’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Starwood Property Trust	$2.05 billion	2.99	$339.21 million	$1.39	13.98
Selectis Health	$36.78 million	N/A	-$3.97 million	($1.30)	-1.92

Starwood Property Trust has higher revenue and earnings than Selectis Health. Selectis Health is trading at a lower price-to-earnings ratio than Starwood Property Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Starwood Property Trust and Selectis Health’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Starwood Property Trust	21.20%	9.99%	0.96%
Selectis Health	-24.65%	-651.76%	-21.33%

Insider & Institutional Ownership

49.8% of Starwood Property Trust shares are held by institutional investors. 5.8% of Starwood Property Trust shares are held by insiders. Comparatively, 15.2% of Selectis Health shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Starwood Property Trust has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500. Comparatively, Selectis Health has a beta of -0.26, meaning that its share price is 126% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Starwood Property Trust and Selectis Health, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Starwood Property Trust	0	3	4	1	2.75
Selectis Health	0	0	0	0	N/A

Starwood Property Trust presently has a consensus target price of $21.88, indicating a potential upside of 12.58%. Given Starwood Property Trust’s higher possible upside, research analysts clearly believe Starwood Property Trust is more favorable than Selectis Health.

Summary

Starwood Property Trust beats Selectis Health on 12 of the 13 factors compared between the two stocks.

About Starwood Property Trust

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and internationally. The company operates through Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, include distressed or non-performing loans. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 2009 and is headquartered in Greenwich, Connecticut.

About Selectis Health

Selectis Health owns and/or operates healthcare facilities in Arkansas, Georgia, Ohio, and Oklahoma, providing a wide array of living services, speech, occupational, physical therapies, social services, and other rehabilitation and healthcare services. Selectis focuses on building strategic relationships with local communities in which its partnership can improve the quality of care for facility residents. With its focused growth strategy, Selectis intends to deepen its American Southcentral and Southeastern market presence to better serve the aging population along a full continuum of care.