Critical Contrast: CareTrust REIT (NASDAQ:CTRE) and Strawberry Fields REIT (NASDAQ:STRW)

Strawberry Fields REIT (NASDAQ:STRW) and CareTrust REIT (NASDAQ:CTRE) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations for Strawberry Fields REIT and CareTrust REIT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Strawberry Fields REIT	0	1	0	1	3.00
CareTrust REIT	1	1	4	0	2.50

Strawberry Fields REIT presently has a consensus target price of $11.8250, suggesting a potential downside of 3.15%. CareTrust REIT has a consensus target price of $31.50, suggesting a potential downside of 8.35%. Given Strawberry Fields REIT’s stronger consensus rating and higher probable upside, research analysts clearly believe Strawberry Fields REIT is more favorable than CareTrust REIT.

Insider and Institutional Ownership

87.8% of CareTrust REIT shares are owned by institutional investors. 10.6% of Strawberry Fields REIT shares are owned by insiders. Comparatively, 0.5% of CareTrust REIT shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Strawberry Fields REIT has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, CareTrust REIT has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Earnings and Valuation

This table compares Strawberry Fields REIT and CareTrust REIT”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Strawberry Fields REIT	$135.15 million	1.17	$2.50 million	$0.60	20.35
CareTrust REIT	$277.03 million	27.06	$125.08 million	$1.20	28.64

CareTrust REIT has higher revenue and earnings than Strawberry Fields REIT. Strawberry Fields REIT is trading at a lower price-to-earnings ratio than CareTrust REIT, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Strawberry Fields REIT and CareTrust REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Strawberry Fields REIT	2.98%	6.64%	0.52%
CareTrust REIT	42.22%	5.59%	4.39%

Dividends

Strawberry Fields REIT pays an annual dividend of $0.64 per share and has a dividend yield of 5.2%. CareTrust REIT pays an annual dividend of $1.34 per share and has a dividend yield of 3.9%. Strawberry Fields REIT pays out 106.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CareTrust REIT pays out 111.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Strawberry Fields REIT has increased its dividend for 1 consecutive years and CareTrust REIT has increased its dividend for 3 consecutive years. Strawberry Fields REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

CareTrust REIT beats Strawberry Fields REIT on 11 of the 18 factors compared between the two stocks.

About Strawberry Fields REIT

Strawberry Fields REIT, Inc. engages in the ownership, acquisition, development, and leasing of skilled nursing and certain other healthcare-related properties. The company was founded by Moishe Gubin in 2014 and is headquartered in South Bend, IN.

About CareTrust REIT

CareTrust REIT, Inc.’s (CareTrust REIT or the Company) primary business consists of acquiring, financing, developing and owning real property to be leased to third-party tenants in the healthcare sector. As of March 31, 2024, the Company owned directly or through a joint venture and leased to independent operators, 228 skilled nursing facilities (SNFs), multi-service campuses, assisted living facilities (ALFs) and independent living facilities (ILFs) consisting of 24,189 operational beds and units located in 29 states with the highest concentration of properties by rental income located in California and Texas. As of March 31, 2024, the Company also had other real estate related investments consisting of one preferred equity investment, nine real estate secured loans receivable and four mezzanine loans receivable with a carrying value of $233.3 million.