Sabra Health Care REIT (NASDAQ:SBRA) and City Office REIT (NYSE:CIO) Financial Comparison

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

Risk & Volatility

Sabra Health Care REIT has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, City Office REIT has a beta of 1.67, meaning that its share price is 67% more volatile than the S&P 500.

Dividends

Sabra Health Care REIT pays an annual dividend of $1.20 per share and has a dividend yield of 9.4%. City Office REIT pays an annual dividend of $0.40 per share and has a dividend yield of 7.8%. Sabra Health Care REIT pays out -222.2% of its earnings in the form of a dividend. City Office REIT pays out -88.9% 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. Sabra Health Care REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Sabra Health Care REIT and City Office REIT’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sabra Health Care REIT	$624.81 million	4.71	-$77.61 million	($0.54)	-23.59
City Office REIT	$180.49 million	1.14	$16.99 million	($0.45)	-11.44

City Office REIT has lower revenue, but higher earnings than Sabra Health Care REIT. Sabra Health Care REIT is trading at a lower price-to-earnings ratio than City Office REIT, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

86.4% of Sabra Health Care REIT shares are held by institutional investors. Comparatively, 70.6% of City Office REIT shares are held by institutional investors. 1.0% of Sabra Health Care REIT shares are held by company insiders. Comparatively, 3.4% of City Office REIT shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Sabra Health Care REIT and City Office REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sabra Health Care REIT	-19.63%	-4.05%	-2.18%
City Office REIT	-5.76%	-1.51%	-0.66%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Sabra Health Care REIT and City Office REIT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sabra Health Care REIT	1	6	1	0	2.00
City Office REIT	0	1	1	0	2.50

Sabra Health Care REIT presently has a consensus target price of $12.94, suggesting a potential upside of 1.60%. City Office REIT has a consensus target price of $10.33, suggesting a potential upside of 100.65%. Given City Office REIT’s stronger consensus rating and higher possible upside, analysts clearly believe City Office REIT is more favorable than Sabra Health Care REIT.

Summary

City Office REIT beats Sabra Health Care REIT on 10 of the 15 factors compared between the two stocks.

About Sabra Health Care REIT

As of June 30, 2023, Sabra's investment portfolio included 392 real estate properties held for investment (consisting of (i) 253 Skilled Nursing/Transitional Care facilities, (ii) 45 senior housing communities (Senior Housing Leased), (iii) 61 senior housing communities operated by third-party property managers pursuant to property management agreements (Senior Housing Managed), (iv) 18 Behavioral Health facilities and (v) 15 Specialty Hospitals and Other facilities), 13 investments in loans receivable (consisting of two mortgage loans and 11 other loans), five preferred equity investments and two investments in unconsolidated joint ventures. As of June 30, 2023, Sabra's real estate properties held for investment included 38,899 beds/units, spread across the United States and Canada.

About City Office REIT

City Office REIT is an internally-managed real estate company focused on acquiring, owning and operating high-quality office properties located predominantly in Sun Belt markets. City Office currently owns or has a controlling interest in 6.0 million square feet of office properties. The Company has elected to be taxed as a real estate investment trust for U.S. federal income tax purposes.