Financial Analysis: Global Medical REIT (NYSE:XRN) vs. Medical Properties Trust (NYSE:MPT)

Global Medical REIT (NYSE:XRN) and Medical Properties Trust (NYSE:MPT) are both small-cap real estate companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.

Risk and Volatility

Global Medical REIT has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Medical Properties Trust has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.

Valuation and Earnings

This table compares Global Medical REIT and Medical Properties Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Medical REIT	$148.21 million	2.69	-$5.84 million	$3.72	8.08
Medical Properties Trust	$972.02 million	1.66	-$277.05 million	($0.06)	-45.17

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

Dividends

Global Medical REIT pays an annual dividend of $1.92 per share and has a dividend yield of 6.4%. Medical Properties Trust pays an annual dividend of $0.36 per share and has a dividend yield of 13.3%. Global Medical REIT pays out 51.6% of its earnings in the form of a dividend. Medical Properties Trust pays out -600.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Medical Properties Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Global Medical REIT	36.82%	13.31%	4.41%
Medical Properties Trust	-2.96%	-0.66%	-0.20%

Insider & Institutional Ownership

57.5% of Global Medical REIT shares are owned by institutional investors. Comparatively, 71.8% of Medical Properties Trust shares are owned by institutional investors. 8.9% of Global Medical REIT shares are owned by insiders. Comparatively, 1.8% of Medical Properties Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Global Medical REIT and Medical Properties Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Medical REIT	0	7	2	0	2.22
Medical Properties Trust	2	1	0	0	1.33

Global Medical REIT presently has a consensus price target of $40.17, suggesting a potential upside of 33.61%. Medical Properties Trust has a consensus price target of $4.15, suggesting a potential upside of 53.14%. Given Medical Properties Trust’s higher probable upside, analysts clearly believe Medical Properties Trust is more favorable than Global Medical REIT.

Summary

Global Medical REIT beats Medical Properties Trust on 10 of the 16 factors compared between the two stocks.

About Global Medical REIT

Global Medical REIT Inc. (GMRE) is a net-lease medical office real estate investment trust (REIT) that owns and acquires healthcare facilities and leases those facilities to physician groups and regional and national healthcare systems.

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.