Analyzing Digital Realty Trust (NYSE:DLR) and Omega Healthcare Investors (NYSE:OHI)

Omega Healthcare Investors (NYSE:OHI) and Digital Realty Trust (NYSE:DLR) are both large-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Omega Healthcare Investors and Digital Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Omega Healthcare Investors	0	7	7	0	2.50
Digital Realty Trust	0	7	16	3	2.85

Omega Healthcare Investors presently has a consensus price target of $47.09, indicating a potential upside of 7.86%. Digital Realty Trust has a consensus price target of $193.22, indicating a potential upside of 21.32%. Given Digital Realty Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Digital Realty Trust is more favorable than Omega Healthcare Investors.

Dividends

Omega Healthcare Investors pays an annual dividend of $2.68 per share and has a dividend yield of 6.1%. Digital Realty Trust pays an annual dividend of $4.88 per share and has a dividend yield of 3.1%. Omega Healthcare Investors pays out 149.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Digital Realty Trust pays out 126.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Omega Healthcare Investors and Digital Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Omega Healthcare Investors	46.83%	10.72%	5.29%
Digital Realty Trust	23.67%	6.41%	2.98%

Earnings and Valuation

This table compares Omega Healthcare Investors and Digital Realty Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Omega Healthcare Investors	$1.05 billion	12.27	$406.33 million	$1.79	24.39
Digital Realty Trust	$5.55 billion	9.85	$615.19 million	$3.87	41.15

Digital Realty Trust has higher revenue and earnings than Omega Healthcare Investors. Omega Healthcare Investors is trading at a lower price-to-earnings ratio than Digital Realty Trust, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

65.3% of Omega Healthcare Investors shares are held by institutional investors. Comparatively, 99.7% of Digital Realty Trust shares are held by institutional investors. 1.5% of Omega Healthcare Investors shares are held by company insiders. Comparatively, 0.1% of Digital Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Omega Healthcare Investors has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, Digital Realty Trust has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.

Summary

Digital Realty Trust beats Omega Healthcare Investors on 11 of the 17 factors compared between the two stocks.

About Omega Healthcare Investors

Omega Healthcare Investors, Inc. engages in the provision of financing and capital to the long-term healthcare industry with a particular focus on skilled nursing facilities, assisted living facilities, independent living facilities, rehabilitation and acute care facilities, and medical office buildings. The company was founded on March 31, 1992 and is headquartered in Hunt Valley, MD.

About Digital Realty Trust

Digital Realty Trust, Inc. operates as a real estate investment trust, which engages in the provision of data center, colocation and interconnection solutions. It serves the following industries: artificial intelligence (AI), networks, cloud, digital media, mobile, financial services, healthcare, and gaming. The company was founded on March 9, 2004, and is headquartered in Dallas, TX.