Critical Contrast: Sabra Health Care REIT (SBRA) and SBA Communications (SBAC)

Sabra Health Care REIT (NASDAQ:SBRA) and SBA Communications (NASDAQ:SBAC) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, earnings, profitability, analyst recommendations, risk and valuation.

Insider & Institutional Ownership

92.5% of Sabra Health Care REIT shares are held by institutional investors. Comparatively, 96.4% of SBA Communications shares are held by institutional investors. 1.1% of Sabra Health Care REIT shares are held by company insiders. Comparatively, 2.7% of SBA Communications shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Sabra Health Care REIT pays an annual dividend of $1.80 per share and has a dividend yield of 8.8%. SBA Communications does not pay a dividend. Sabra Health Care REIT pays out 74.1% of its earnings in the form of a dividend. Sabra Health Care REIT has raised its dividend for 8 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Sabra Health Care REIT and SBA Communications, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sabra Health Care REIT 1 7 2 0 2.10
SBA Communications 0 3 7 0 2.70

Sabra Health Care REIT presently has a consensus price target of $21.00, suggesting a potential upside of 2.39%. SBA Communications has a consensus price target of $179.88, suggesting a potential downside of 2.23%. Given Sabra Health Care REIT’s higher possible upside, analysts clearly believe Sabra Health Care REIT is more favorable than SBA Communications.

Volatility and Risk

Sabra Health Care REIT has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, SBA Communications has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Profitability

This table compares Sabra Health Care REIT and SBA Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sabra Health Care REIT 61.85% 11.80% 5.76%
SBA Communications -0.11% -0.65% 0.25%

Valuation and Earnings

This table compares Sabra Health Care REIT and SBA Communications’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sabra Health Care REIT $405.65 million 9.01 $158.38 million $2.43 8.44
SBA Communications $1.73 billion 12.07 $103.65 million N/A N/A

Sabra Health Care REIT has higher earnings, but lower revenue than SBA Communications.

Summary

Sabra Health Care REIT beats SBA Communications on 8 of the 15 factors compared between the two stocks.

Sabra Health Care REIT Company Profile

As of September 30, 2018, Sabra's investment portfolio included 487 real estate properties held for investment (consisting of (i) 350 Skilled Nursing/Transitional Care facilities, (ii) 91 Senior Housing communities (“Senior Housing – Leased”), (iii) 24 Senior Housing communities operated by third-party property managers pursuant to property management agreements (“Senior Housing – Managed”) and (iv) 22 Specialty Hospitals and Other facilities), one investment in a direct financing lease, 22 investments in loans receivable (consisting of (i) one mortgage loan, (ii) two construction loans, (iii) one mezzanine loan, (iv) one pre-development loan and (v) 17 other loans), 11 preferred equity investments and one investment in an unconsolidated joint venture that owns 172 Senior Housing – Managed communities. As of September 30, 2018, Sabra's real estate properties held for investment included 49,954 beds/units and its unconsolidated joint venture included 7,652 beds/units, spread across the United States and Canada.

SBA Communications Company Profile

SBA Communications Corporation is a first choice provider and leading owner and operator of wireless communications infrastructure in North, Central, and South America. By “Building Better Wireless,” SBA generates revenue from two primary businesses – site leasing and site development services. The primary focus of the Company is the leasing of antenna space on its multi-tenant communication sites to a variety of wireless service providers under long-term lease contracts.

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