Head-To-Head Review: RLJ Lodging Trust (NYSE:RLJ) versus Healthcare Realty Trust (NYSE:HR)

Healthcare Realty Trust (NYSE:HR) and RLJ Lodging Trust (NYSE:RLJ) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Analyst Ratings

This is a breakdown of recent recommendations for Healthcare Realty Trust and RLJ Lodging Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Healthcare Realty Trust	1	6	2	0	2.11
RLJ Lodging Trust	1	3	4	0	2.38

Healthcare Realty Trust currently has a consensus price target of $17.00, indicating a potential downside of 3.24%. RLJ Lodging Trust has a consensus price target of $12.69, indicating a potential upside of 37.76%. Given RLJ Lodging Trust’s stronger consensus rating and higher possible upside, analysts clearly believe RLJ Lodging Trust is more favorable than Healthcare Realty Trust.

Insider & Institutional Ownership

92.3% of RLJ Lodging Trust shares are held by institutional investors. 0.6% of Healthcare Realty Trust shares are held by company insiders. Comparatively, 2.6% of RLJ Lodging Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Healthcare Realty Trust	-37.53%	-7.22%	-3.91%
RLJ Lodging Trust	4.93%	3.34%	1.35%

Volatility and Risk

Healthcare Realty Trust has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, RLJ Lodging Trust has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500.

Valuation & Earnings

This table compares Healthcare Realty Trust and RLJ Lodging Trust’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Healthcare Realty Trust	$1.32 billion	5.07	-$278.26 million	($1.33)	-13.25
RLJ Lodging Trust	$1.35 billion	1.06	$76.40 million	$0.28	32.82

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

Dividends

Healthcare Realty Trust pays an annual dividend of $1.24 per share and has a dividend yield of 7.0%. RLJ Lodging Trust pays an annual dividend of $0.60 per share and has a dividend yield of 6.5%. Healthcare Realty Trust pays out -93.2% of its earnings in the form of a dividend. RLJ Lodging Trust pays out 214.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Healthcare Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

RLJ Lodging Trust beats Healthcare Realty Trust on 13 of the 16 factors compared between the two stocks.

About Healthcare Realty Trust

Healthcare Realty (NYSE: HR) is a real estate investment trust (REIT) that owns and operates medical outpatient buildings primarily located around market-leading hospital campuses. The Company selectively grows its portfolio through property acquisition and development. As the first and largest REIT to specialize in medical outpatient buildings, Healthcare Realty's portfolio includes more than 700 properties totaling over 40 million square feet concentrated in 15 growth markets.

About RLJ Lodging Trust

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio currently consists of 96 hotels with approximately 21,200 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.