Reviewing Arbor Realty Trust (NYSE:ABR) & Medical Properties Trust (NYSE:MPW)

Arbor Realty Trust (NYSE:ABR) and Medical Properties Trust (NYSE:MPW) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitability, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares Arbor Realty Trust and Medical Properties Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arbor Realty Trust	22.66%	14.75%	2.65%
Medical Properties Trust	N/A	-38.83%	-15.05%

Insider & Institutional Ownership

57.3% of Arbor Realty Trust shares are held by institutional investors. Comparatively, 71.8% of Medical Properties Trust shares are held by institutional investors. 3.7% of Arbor Realty Trust shares are held by company insiders. Comparatively, 1.5% of Medical Properties Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Arbor Realty Trust pays an annual dividend of $1.72 per share and has a dividend yield of 15.6%. Medical Properties Trust pays an annual dividend of $0.32 per share and has a dividend yield of 5.9%. Arbor Realty Trust pays out 144.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Medical Properties Trust pays out -8.4% of its earnings in the form of a dividend. Arbor Realty Trust has raised its dividend for 13 consecutive years. Arbor Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Arbor Realty Trust has a beta of 1.66, meaning that its share price is 66% more volatile than the S&P 500. Comparatively, Medical Properties Trust has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Arbor Realty Trust and Medical Properties Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arbor Realty Trust	2	3	1	0	1.83
Medical Properties Trust	1	4	2	0	2.14

Arbor Realty Trust currently has a consensus price target of $13.38, suggesting a potential upside of 21.32%. Medical Properties Trust has a consensus price target of $5.75, suggesting a potential upside of 5.60%. Given Arbor Realty Trust’s higher possible upside, equities research analysts clearly believe Arbor Realty Trust is more favorable than Medical Properties Trust.

Earnings & Valuation

This table compares Arbor Realty Trust and Medical Properties Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arbor Realty Trust	$625.94 million	3.34	$264.64 million	$1.19	9.26
Medical Properties Trust	$995.55 million	3.28	-$556.48 million	($3.80)	-1.43

Arbor Realty Trust has higher earnings, but lower revenue than Medical Properties Trust. Medical Properties Trust is trading at a lower price-to-earnings ratio than Arbor Realty Trust, indicating that it is currently the more affordable of the two stocks.

Summary

Arbor Realty Trust beats Medical Properties Trust on 12 of the 17 factors compared between the two stocks.

About Arbor Realty Trust

Arbor Realty Trust, Inc. invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States. The company operates through Structured Business and Agency Business segments. It primarily invests in bridge and mezzanine loans, including junior participating interests in first mortgages, and preferred and direct equity, as well as real estate-related joint ventures, real estate-related notes, and various mortgage-related securities. In addition, the company offers bridge financing products to borrowers who seek short-term capital to be used in an acquisition of property; financing by making preferred equity investments in entities that directly or indirectly own real property; mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction; junior participation financing in the form of a junior participating interest in the senior debt; and financing products to borrowers who are looking to acquire conventional, workforce, and affordable single-family housing. Further, it underwrites, originates, sells, and services multifamily mortgage loans through conduit/commercial mortgage-backed securities programs. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Arbor Realty Trust, Inc. was incorporated in 2003 and is headquartered in Uniondale, New York.

About Medical Properties Trust

Medical Properties Trust, Inc. is a self-advised real estate investment trust formed in 2003 to acquire and develop net-leased hospital facilities. From its inception in Birmingham, Alabama, the Company has grown to become one of the world's largest owners of hospital real estate with 441 facilities and approximately 44,000 licensed beds as of September 30, 2023. Since the end of the third quarter, the Company has sold four facilities and now owns approximately 43,000 licensed beds in nine countries across three continents. MPT's financing model facilitates acquisitions and recapitalizations and allows operators of hospitals to unlock the value of their real estate assets to fund facility improvements, technology upgrades and other investments in operations.