Diversified Healthcare Trust (NASDAQ:DHC) vs. LTC Properties (NYSE:LTC) Critical Survey

Diversified Healthcare Trust (NASDAQ:DHC) and LTC Properties (NYSE:LTC) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, valuation, risk and profitability.

Dividends

Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 0.6%. LTC Properties pays an annual dividend of $2.28 per share and has a dividend yield of 5.9%. Diversified Healthcare Trust pays out -3.4% of its earnings in the form of a dividend. LTC Properties pays out 93.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Diversified Healthcare Trust has a beta of 2.35, suggesting that its share price is 135% more volatile than the S&P 500. Comparatively, LTC Properties has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500.

Insider and Institutional Ownership

76.0% of Diversified Healthcare Trust shares are held by institutional investors. Comparatively, 69.3% of LTC Properties shares are held by institutional investors. 1.4% of Diversified Healthcare Trust shares are held by company insiders. Comparatively, 2.1% of LTC Properties shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Diversified Healthcare Trust and LTC Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diversified Healthcare Trust	-18.59%	-15.98%	-6.08%
LTC Properties	44.82%	10.95%	6.14%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Diversified Healthcare Trust and LTC Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diversified Healthcare Trust	1	2	1	0	2.00
LTC Properties	0	4	2	1	2.57

Diversified Healthcare Trust currently has a consensus price target of $7.25, indicating a potential upside of 4.47%. LTC Properties has a consensus price target of $39.60, indicating a potential upside of 2.22%. Given Diversified Healthcare Trust’s higher possible upside, analysts clearly believe Diversified Healthcare Trust is more favorable than LTC Properties.

Earnings and Valuation

This table compares Diversified Healthcare Trust and LTC Properties”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Healthcare Trust	$1.54 billion	1.09	-$285.89 million	($1.19)	-5.83
LTC Properties	$262.85 million	7.15	$117.97 million	$2.44	15.88

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

Summary

LTC Properties beats Diversified Healthcare Trust on 12 of the 17 factors compared between the two stocks.

About Diversified Healthcare Trust

Diversified Healthcare Trust is a real estate investment trust, which engages in the ownership of senior living communities, medical office buildings, and wellness centers. It operates through the following segments: Office Portfolio, Senior Housing Operating Portfolio (SHOP), and Non-Segment. The Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. The SHOP segment manages senior living communities that offers short term and long term residential care, and other services for residents where it pay fees to the operator to manage the communities for its account. The company was founded on December 16, 1998 and is headquartered in Newton, MA.

About LTC Properties

LTC Properties, Inc. is a real estate investment trust, which engages in managing seniors housing and health care properties. It operates through the Texas, Michigan, Florida, Wisconsin, Colorado, and Remaining States geographic segments. The company was founded by Andre C. Dimitriadis on May 12, 1992 and is headquartered in Westlake Village, CA.