Critical Analysis: Diversified Healthcare Trust (NASDAQ:DHC) versus Acadia Realty Trust (NYSE:AKR)

Diversified Healthcare Trust (NASDAQ:DHC) and Acadia Realty Trust (NYSE:AKR) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.

Earnings & Valuation

This table compares Diversified Healthcare Trust and Acadia Realty Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Healthcare Trust	$1.41 billion	0.45	-$293.57 million	($1.61)	-1.64
Acadia Realty Trust	$351.87 million	8.20	$19.87 million	$0.18	133.89

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Diversified Healthcare Trust	-26.09%	-17.55%	-7.20%
Acadia Realty Trust	3.07%	0.48%	0.25%

Dividends

Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.5%. Acadia Realty Trust pays an annual dividend of $0.76 per share and has a dividend yield of 3.2%. Diversified Healthcare Trust pays out -2.5% of its earnings in the form of a dividend. Acadia Realty Trust pays out 422.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

76.0% of Diversified Healthcare Trust shares are held by institutional investors. Comparatively, 97.7% of Acadia Realty Trust shares are held by institutional investors. 1.4% of Diversified Healthcare Trust shares are held by company insiders. Comparatively, 2.8% of Acadia Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Diversified Healthcare Trust has a beta of 2.17, meaning that its stock price is 117% more volatile than the S&P 500. Comparatively, Acadia Realty Trust has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Diversified Healthcare Trust and Acadia Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diversified Healthcare Trust	1	1	1	0	2.00
Acadia Realty Trust	0	2	2	0	2.50

Diversified Healthcare Trust currently has a consensus price target of $4.50, suggesting a potential upside of 70.45%. Acadia Realty Trust has a consensus price target of $23.00, suggesting a potential downside of 4.56%. Given Diversified Healthcare Trust’s higher possible upside, equities research analysts plainly believe Diversified Healthcare Trust is more favorable than Acadia Realty Trust.

Summary

Acadia Realty Trust beats Diversified Healthcare Trust on 12 of the 16 factors compared between the two stocks.

About Diversified Healthcare Trust

Diversified Healthcare Trust is a real estate investment trust, which engages in the ownership of senior living communities, medical office buildings, and wellness centers. It operates through the following segments: Office Portfolio, Senior Housing Operating Portfolio (SHOP), and Non-Segment. The Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. The SHOP segment manages senior living communities that offers short term and long term residential care, and other services for residents where it pay fees to the operator to manage the communities for its account. The company was founded on December 16, 1998 and is headquartered in Newton, MA.

About Acadia Realty Trust

Acadia Realty Trust is an equity real estate investment trust focused on delivering long-term, profitable growth via its dual Core Portfolio and Fund operating platforms and its disciplined, location-driven investment strategy. Acadia Realty Trust is accomplishing this goal by building a best-in-class core real estate portfolio with meaningful concentrations of assets in the nation's most dynamic corridors; making profitable opportunistic and value-add investments through its series of discretionary, institutional funds; and maintaining a strong balance sheet.