CareTrust REIT (NASDAQ:CTRE) versus Franklin Street Properties (NYSE:FSP) Financial Review

CareTrust REIT (NASDAQ:CTRE) and Franklin Street Properties (NYSE:FSP) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, profitability, institutional ownership and earnings.

Insider and Institutional Ownership

87.8% of CareTrust REIT shares are owned by institutional investors. Comparatively, 61.4% of Franklin Street Properties shares are owned by institutional investors. 1.8% of CareTrust REIT shares are owned by company insiders. Comparatively, 6.2% of Franklin Street Properties shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

CareTrust REIT pays an annual dividend of $1.16 per share and has a dividend yield of 4.9%. Franklin Street Properties pays an annual dividend of $0.04 per share and has a dividend yield of 2.2%. CareTrust REIT pays out 236.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Franklin Street Properties pays out -8.5% of its earnings in the form of a dividend. CareTrust REIT has raised its dividend for 1 consecutive years. CareTrust REIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares CareTrust REIT and Franklin Street Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CareTrust REIT	24.67%	5.14%	2.98%
Franklin Street Properties	-33.02%	-6.52%	-4.07%

Earnings & Valuation

This table compares CareTrust REIT and Franklin Street Properties’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CareTrust REIT	$217.77 million	14.72	$53.74 million	$0.49	48.45
Franklin Street Properties	$145.71 million	1.32	-$48.11 million	($0.47)	-3.96

CareTrust REIT has higher revenue and earnings than Franklin Street Properties. Franklin Street Properties is trading at a lower price-to-earnings ratio than CareTrust REIT, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for CareTrust REIT and Franklin Street Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CareTrust REIT	0	2	5	0	2.71
Franklin Street Properties	0	0	0	0	N/A

CareTrust REIT currently has a consensus price target of $23.57, indicating a potential downside of 0.71%. Franklin Street Properties has a consensus price target of $2.50, indicating a potential upside of 34.41%. Given Franklin Street Properties’ higher possible upside, analysts clearly believe Franklin Street Properties is more favorable than CareTrust REIT.

Volatility & Risk

CareTrust REIT has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500. Comparatively, Franklin Street Properties has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.

Summary

CareTrust REIT beats Franklin Street Properties on 13 of the 16 factors compared between the two stocks.

About CareTrust REIT

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States.

About Franklin Street Properties

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes.