Critical Comparison: Omega Healthcare Investors (NYSE:OHI) vs. Federal Realty Investment Trust (NYSE:FRT)

Omega Healthcare Investors (NYSE:OHI) and Federal Realty Investment Trust (NYSE:FRT) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, profitability, risk and institutional ownership.

Dividends

Omega Healthcare Investors pays an annual dividend of $2.68 per share and has a dividend yield of 7.1%. Federal Realty Investment Trust pays an annual dividend of $4.40 per share and has a dividend yield of 3.9%. Omega Healthcare Investors pays out 197.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust pays out 127.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federal Realty Investment Trust has raised its dividend for 58 consecutive years.

Insider and Institutional Ownership

65.3% of Omega Healthcare Investors shares are held by institutional investors. Comparatively, 93.9% of Federal Realty Investment Trust shares are held by institutional investors. 1.4% of Omega Healthcare Investors shares are held by insiders. Comparatively, 1.0% of Federal Realty Investment Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Omega Healthcare Investors and Federal Realty Investment Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Omega Healthcare Investors	$1.01 billion	10.12	$242.18 million	$1.36	27.89
Federal Realty Investment Trust	$1.18 billion	7.86	$236.99 million	$3.44	32.60

Omega Healthcare Investors has higher earnings, but lower revenue than Federal Realty Investment Trust. Omega Healthcare Investors is trading at a lower price-to-earnings ratio than Federal Realty Investment Trust, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Omega Healthcare Investors and Federal Realty Investment Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Omega Healthcare Investors	34.41%	8.83%	3.81%
Federal Realty Investment Trust	24.67%	10.01%	3.47%

Volatility & Risk

Omega Healthcare Investors has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Federal Realty Investment Trust has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Omega Healthcare Investors and Federal Realty Investment Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Omega Healthcare Investors	0	6	6	0	2.50
Federal Realty Investment Trust	0	1	12	0	2.92

Omega Healthcare Investors currently has a consensus target price of $40.18, indicating a potential upside of 5.94%. Federal Realty Investment Trust has a consensus target price of $123.62, indicating a potential upside of 10.24%. Given Federal Realty Investment Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Federal Realty Investment Trust is more favorable than Omega Healthcare Investors.

Summary

Federal Realty Investment Trust beats Omega Healthcare Investors on 11 of the 17 factors compared between the two stocks.

About Omega Healthcare Investors

Omega is a REIT that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities. Its portfolio of assets is operated by a diverse group of healthcare companies, predominantly in a triple-net lease structure. The assets span all regions within the U.S., as well as in the U.K.

About Federal Realty Investment Trust

Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as San Francisco and Los Angeles. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities. Federal Realty's 102 properties include approximately 3,300 tenants, in 26 million commercial square feet, and approximately 3,100 residential units. Federal Realty has increased its quarterly dividends to its shareholders for 56 consecutive years, the longest record in the REIT industry. Federal Realty is an S&P 500 index member and its shares are traded on the NYSE under the symbol FRT.