Analyzing InterRent Real Estate Investment Trust (OTCMKTS:IIPZF) & CareTrust REIT (NASDAQ:CTRE)

CareTrust REIT (NASDAQ:CTREGet Rating) and InterRent Real Estate Investment Trust (OTCMKTS:IIPZFGet Rating) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Profitability

This table compares CareTrust REIT and InterRent Real Estate Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CareTrust REIT -1.87% -0.42% -0.22%
InterRent Real Estate Investment Trust 145.82% 12.13% 7.17%

Dividends

CareTrust REIT pays an annual dividend of $1.10 per share and has a dividend yield of 5.8%. InterRent Real Estate Investment Trust pays an annual dividend of $0.25 per share and has a dividend yield of 2.7%. CareTrust REIT pays out -2,750.0% of its earnings in the form of a dividend. InterRent Real Estate Investment Trust pays out 15.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. CareTrust REIT has raised its dividend for 8 consecutive years. CareTrust REIT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares CareTrust REIT and InterRent Real Estate Investment Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CareTrust REIT $192.35 million 9.64 $71.98 million ($0.04) -477.75
InterRent Real Estate Investment Trust $147.71 million 8.89 $294.97 million $1.67 5.57

InterRent Real Estate Investment Trust has lower revenue, but higher earnings than CareTrust REIT. CareTrust REIT is trading at a lower price-to-earnings ratio than InterRent Real Estate Investment Trust, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

84.0% of CareTrust REIT shares are owned by institutional investors. 1.8% of CareTrust REIT shares are owned by insiders. Comparatively, 6.8% of InterRent Real Estate Investment Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for CareTrust REIT and InterRent Real Estate Investment Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CareTrust REIT 0 4 1 1 2.50
InterRent Real Estate Investment Trust 0 0 1 0 3.00

CareTrust REIT currently has a consensus target price of $20.92, indicating a potential upside of 9.45%. InterRent Real Estate Investment Trust has a consensus target price of $16.41, indicating a potential upside of 76.41%. Given InterRent Real Estate Investment Trust’s stronger consensus rating and higher probable upside, analysts clearly believe InterRent Real Estate Investment Trust is more favorable than CareTrust REIT.

Volatility & Risk

CareTrust REIT has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, InterRent Real Estate Investment Trust has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Summary

InterRent Real Estate Investment Trust beats CareTrust REIT on 9 of the 17 factors compared between the two stocks.

About CareTrust REIT

(Get Rating)

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States.

About InterRent Real Estate Investment Trust

(Get Rating)

InterRent REIT is a growth-oriented real estate investment trust engaged in increasing Unitholder value and creating a growing and sustainable distribution through the acquisition and ownership of multi-residential properties. InterRent's strategy is to expand its portfolio primarily within markets that have exhibited stable market vacancies, sufficient suites available to attain the critical mass necessary to implement an efficient portfolio management structure and, offer opportunities for accretive acquisitions. InterRent's primary objectives are to use the proven industry experience of the Trustees, Management and Operational Team to: (i) to grow both funds from operations per Unit and net asset value per Unit through investments in a diversified portfolio of multi-residential properties; (ii) to provide Unitholders with sustainable and growing cash distributions, payable monthly; and (iii) to maintain a conservative payout ratio and balance sheet.

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