Senior Housing Properties Trust (SNH) vs. istar (STAR) Financial Analysis

istar (NYSE: STAR) and Senior Housing Properties Trust (NASDAQ:SNH) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, dividends, institutional ownership, risk, earnings, profitability and analyst recommendations.

Dividends

Senior Housing Properties Trust pays an annual dividend of $1.56 per share and has a dividend yield of 8.0%. istar does not pay a dividend. Senior Housing Properties Trust pays out 294.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings & Valuation

This table compares istar and Senior Housing Properties Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
istar $477.03 million 1.64 $95.30 million $0.91 12.62
Senior Housing Properties Trust $1.06 billion 4.36 $141.29 million $0.53 36.62

Senior Housing Properties Trust has higher revenue and earnings than istar. istar is trading at a lower price-to-earnings ratio than Senior Housing Properties Trust, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

87.5% of istar shares are held by institutional investors. Comparatively, 73.8% of Senior Housing Properties Trust shares are held by institutional investors. 4.4% of istar shares are held by insiders. Comparatively, 1.3% of Senior Housing Properties Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares istar and Senior Housing Properties Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
istar 24.13% 19.57% 3.97%
Senior Housing Properties Trust 11.72% 3.79% 1.74%

Analyst Recommendations

This is a breakdown of current recommendations for istar and Senior Housing Properties Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
istar 0 2 0 0 2.00
Senior Housing Properties Trust 1 4 3 0 2.25

istar currently has a consensus price target of $14.00, suggesting a potential upside of 21.95%. Senior Housing Properties Trust has a consensus price target of $21.64, suggesting a potential upside of 11.50%. Given istar’s higher probable upside, analysts plainly believe istar is more favorable than Senior Housing Properties Trust.

Risk and Volatility

istar has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Senior Housing Properties Trust has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500.

Summary

istar beats Senior Housing Properties Trust on 9 of the 16 factors compared between the two stocks.

About istar

iStar Inc. finances, invests in and develops real estate and real estate related projects as part of its integrated investment platform. The Company’s four business segments are Real Estate Finance, Net Lease, Operating Properties, and Land and Development. The Real Estate Finance portfolio consists of senior and mezzanine real estate loans that may be either fixed-rate or variable-rate. The Net Lease portfolio consists of properties owned by the Company and leased to single tenants, where the properties are subject to long-term leases. The Operating Properties portfolio consists of commercial and residential properties, which represent a pool of assets across a range of geographies and property types. The Land and Development portfolio consists of land entitled for master planned communities, as well as waterfront and urban infill land parcels located throughout the United States. Its Land and Development projects include Great Oaks, Sage Scottsdale, Naples Reserve and Coney Island.

About Senior Housing Properties Trust

Senior Housing Properties Trust is a real estate investment trust (REIT). The Company’s segments include triple net senior living communities that provide short term and long term residential care and other services for residents; managed senior living communities that provide short term and long term residential care and other services for residents; properties leased to medical providers, medical related businesses, clinics and biotech laboratory tenants (MOBs), and all other, including certain properties that offer wellness, fitness and spa services to members. Properties in triple net senior living communities segment include leased independent living communities, assisted living communities and skilled nursing facilities. Properties in managed senior living communities segment include managed independent living communities and assisted living communities.

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