Analyzing Paramount Group (NYSE:PGRE) & Community Healthcare Trust (NYSE:CHCT)

Community Healthcare Trust (NYSE:CHCT) and Paramount Group (NYSE:PGRE) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of recent ratings for Community Healthcare Trust and Paramount Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Community Healthcare Trust	0	2	1	0	2.33
Paramount Group	2	0	2	0	2.00

Community Healthcare Trust currently has a consensus price target of $21.00, suggesting a potential upside of 24.22%. Paramount Group has a consensus price target of $5.19, suggesting a potential downside of 19.51%. Given Community Healthcare Trust’s stronger consensus rating and higher possible upside, research analysts plainly believe Community Healthcare Trust is more favorable than Paramount Group.

Institutional and Insider Ownership

87.8% of Community Healthcare Trust shares are held by institutional investors. Comparatively, 65.6% of Paramount Group shares are held by institutional investors. 5.1% of Community Healthcare Trust shares are held by company insiders. Comparatively, 13.8% of Paramount Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Community Healthcare Trust and Paramount Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community Healthcare Trust	$116.53 million	4.11	$7.71 million	($0.31)	-54.53
Paramount Group	$755.59 million	1.87	-$259.74 million	($0.31)	-20.79

Community Healthcare Trust has higher earnings, but lower revenue than Paramount Group. Community Healthcare Trust is trading at a lower price-to-earnings ratio than Paramount Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Community Healthcare Trust pays an annual dividend of $1.88 per share and has a dividend yield of 11.1%. Paramount Group pays an annual dividend of $0.14 per share and has a dividend yield of 2.2%. Community Healthcare Trust pays out -606.5% of its earnings in the form of a dividend. Paramount Group pays out -45.2% 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. Community Healthcare Trust has raised its dividend for 3 consecutive years. Community Healthcare Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Community Healthcare Trust has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Paramount Group has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.

Profitability

This table compares Community Healthcare Trust and Paramount Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Community Healthcare Trust	-2.75%	-0.65%	-0.32%
Paramount Group	-27.92%	-5.26%	-2.69%

Summary

Community Healthcare Trust beats Paramount Group on 11 of the 16 factors compared between the two stocks.

About Community Healthcare Trust

Community Healthcare Trust Incorporated (the Company”, we”, our”) was organized in the State of Maryland on March 28, 2014. The Company is a fully-integrated healthcare real estate company that owns and acquires real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers. As of March 31, 2024, the Company had investments of approximately $1.1 billion in 197 real estate properties (including a portion of one property accounted for as a sales-type lease with a gross amount totaling approximately $3.0 million and two properties classified as an asset held for sale with an aggregate amount totaling approximately $7.5 million. The properties are located in 35 states, totaling approximately 4.4 million square feet in the aggregate and were approximately 92.3% leased, excluding real estate assets held for sale, at March 31, 2024 with a weighted average remaining lease term of approximately 6.9 years.

About Paramount Group

Paramount Group, Inc. (“Paramount” or the “Company”) is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.