Critical Review: Kimco Realty (NYSE:KIM) & Diversified Healthcare Trust (NASDAQ:DHC)

Kimco Realty (NYSE:KIMGet Free Report) and Diversified Healthcare Trust (NASDAQ:DHCGet Free Report) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Profitability

This table compares Kimco Realty and Diversified Healthcare Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kimco Realty 19.17% 3.54% 1.92%
Diversified Healthcare Trust -22.80% -13.72% -5.97%

Dividends

Kimco Realty pays an annual dividend of $0.96 per share and has a dividend yield of 5.0%. Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.4%. Kimco Realty pays out 181.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diversified Healthcare Trust pays out -2.9% of its earnings in the form of a dividend. Kimco Realty has raised its dividend for 1 consecutive years. Kimco Realty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Kimco Realty and Diversified Healthcare Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kimco Realty $1.78 billion 7.19 $654.27 million $0.53 35.87
Diversified Healthcare Trust $1.41 billion 0.50 -$293.57 million ($1.37) -2.14

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

Risk & Volatility

Kimco Realty has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500. Comparatively, Diversified Healthcare Trust has a beta of 2.14, meaning that its share price is 114% more volatile than the S&P 500.

Institutional and Insider Ownership

89.3% of Kimco Realty shares are held by institutional investors. Comparatively, 76.0% of Diversified Healthcare Trust shares are held by institutional investors. 2.2% of Kimco Realty shares are held by company insiders. Comparatively, 1.4% of Diversified Healthcare Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Kimco Realty and Diversified Healthcare Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kimco Realty 0 6 5 0 2.45
Diversified Healthcare Trust 0 0 1 0 3.00

Kimco Realty currently has a consensus target price of $21.52, indicating a potential upside of 13.22%. Diversified Healthcare Trust has a consensus target price of $4.50, indicating a potential upside of 53.58%. Given Diversified Healthcare Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Diversified Healthcare Trust is more favorable than Kimco Realty.

Summary

Kimco Realty beats Diversified Healthcare Trust on 13 of the 17 factors compared between the two stocks.

About Kimco Realty

(Get Free Report)

Kimco Realty Corp. is a real estate investment trust (REIT) headquartered in New Hyde Park, N.Y., that is one of North America’s largest publicly traded owners and operators of open-air shopping centers. As of December 31, 2018, the company owned interests in 437 U.S. shopping centers comprising 76 million square feet of leasable space primarily concentrated in the top major metropolitan markets.

About Diversified Healthcare Trust

(Get Free Report)

DHC is a real estate investment trust, or REIT, focused on owning high-quality healthcare properties located throughout the United States. DHC seeks diversification across the health services spectrum by care delivery and practice type, by scientific research disciplines and by property type and location. As of December 31, 2023, DHC's approximately $7.2 billion portfolio included 371 properties in 36 states and Washington, D.C., occupied by approximately 500 tenants, and totaling approximately 8.6 million square feet of life science and medical office properties and more than 27,000 senior living units. DHC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023 and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. DHC is headquartered in Newton, MA.

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