Critical Review: Medical Properties Trust (NYSE:MPT) & Community Healthcare Trust (NYSE:CHCT)

Medical Properties Trust (NYSE:MPT) and Community Healthcare Trust (NYSE:CHCT) are both small-cap real estate companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a summary of recent ratings and price targets for Medical Properties Trust and Community Healthcare Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medical Properties Trust	2	1	0	0	1.33
Community Healthcare Trust	0	3	2	0	2.40

Medical Properties Trust currently has a consensus target price of $4.15, indicating a potential upside of 27.30%. Community Healthcare Trust has a consensus target price of $18.50, indicating a potential upside of 35.73%. Given Community Healthcare Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Community Healthcare Trust is more favorable than Medical Properties Trust.

Earnings & Valuation

This table compares Medical Properties Trust and Community Healthcare Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medical Properties Trust	$972.02 million	2.00	-$277.05 million	($0.06)	-54.33
Community Healthcare Trust	$124.78 million	3.13	$5.10 million	$0.67	20.34

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

Profitability

This table compares Medical Properties Trust and Community Healthcare Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medical Properties Trust	-2.96%	-0.66%	-0.20%
Community Healthcare Trust	16.81%	4.96%	2.10%

Volatility & Risk

Medical Properties Trust has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500. Comparatively, Community Healthcare Trust has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500.

Dividends

Medical Properties Trust pays an annual dividend of $0.36 per share and has a dividend yield of 11.0%. Community Healthcare Trust pays an annual dividend of $1.32 per share and has a dividend yield of 9.7%. Medical Properties Trust pays out -600.0% of its earnings in the form of a dividend. Community Healthcare Trust pays out 197.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Community Healthcare Trust has raised its dividend for 3 consecutive years. Medical Properties Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

71.8% of Medical Properties Trust shares are held by institutional investors. Comparatively, 87.8% of Community Healthcare Trust shares are held by institutional investors. 1.8% of Medical Properties Trust shares are held by company insiders. Comparatively, 5.3% of Community Healthcare Trust shares are held by company 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.

Summary

Community Healthcare Trust beats Medical Properties Trust on 13 of the 17 factors compared between the two stocks.

About Medical Properties Trust

Medical Properties Trust, Inc. is a self-advised real estate investment trust formed to capitalize on the changing trends in healthcare delivery by acquiring and developing net-leased healthcare facilities. MPT’s financing model allows hospitals and other healthcare facilities to unlock the value of their underlying real estate in order to fund facility improvements, technology upgrades, staff additions and new construction. Facilities include acute care hospitals, inpatient rehabilitation hospitals, long-term acute care hospitals, and other medical and surgical facilities.

About Community Healthcare Trust

Community Healthcare Trust Incorporated (the Company”, we”, our”) was organized in the State of Maryland on March 28, 2014. The Company is a fully-integrated healthcare real estate company that owns and acquires real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers. As of March 31, 2024, the Company had investments of approximately $1.1 billion in 197 real estate properties (including a portion of one property accounted for as a sales-type lease with a gross amount totaling approximately $3.0 million and two properties classified as an asset held for sale with an aggregate amount totaling approximately $7.5 million. The properties are located in 35 states, totaling approximately 4.4 million square feet in the aggregate and were approximately 92.3% leased, excluding real estate assets held for sale, at March 31, 2024 with a weighted average remaining lease term of approximately 6.9 years.