Contrasting STAG Industrial (NYSE:STAG) & Diversified Healthcare Trust (NASDAQ:DHC)

STAG Industrial (NYSE:STAG) and Diversified Healthcare Trust (NASDAQ:DHC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Insider and Institutional Ownership

88.7% of STAG Industrial shares are owned by institutional investors. Comparatively, 76.0% of Diversified Healthcare Trust shares are owned by institutional investors. 1.1% of STAG Industrial shares are owned by insiders. Comparatively, 1.4% of Diversified Healthcare Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares STAG Industrial and Diversified Healthcare Trust’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
STAG Industrial	$707.84 million	10.37	$192.85 million	$1.00	40.31
Diversified Healthcare Trust	$1.41 billion	0.55	-$293.57 million	($1.37)	-2.37

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

Dividends

STAG Industrial pays an annual dividend of $1.48 per share and has a dividend yield of 3.7%. Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.2%. STAG Industrial pays out 148.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diversified Healthcare Trust pays out -2.9% of its earnings in the form of a dividend.

Profitability

This table compares STAG Industrial and Diversified Healthcare Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
STAG Industrial	25.41%	5.46%	2.97%
Diversified Healthcare Trust	-24.14%	-15.05%	-6.48%

Analyst Ratings

This is a breakdown of current ratings and price targets for STAG Industrial and Diversified Healthcare Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
STAG Industrial	0	6	3	0	2.33
Diversified Healthcare Trust	0	0	1	0	3.00

STAG Industrial presently has a consensus target price of $39.50, indicating a potential downside of 2.01%. Diversified Healthcare Trust has a consensus target price of $4.50, indicating a potential upside of 38.46%. Given Diversified Healthcare Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Diversified Healthcare Trust is more favorable than STAG Industrial.

Volatility & Risk

STAG Industrial has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500. Comparatively, Diversified Healthcare Trust has a beta of 2.2, indicating that its stock price is 120% more volatile than the S&P 500.

Summary

STAG Industrial beats Diversified Healthcare Trust on 10 of the 16 factors compared between the two stocks.

About STAG Industrial

We are a REIT focused on the acquisition, ownership, and operation of industrial properties throughout the United States. Our platform is designed to (i) identify properties for acquisition that offer relative value across CBRE-EA Tier 1 industrial real estate markets, industries, and tenants through the principled application of our proprietary risk assessment model, (ii) provide growth through sophisticated industrial operation and an attractive opportunity set, and (iii) capitalize our business appropriately given the characteristics of our assets. We are organized and conduct our operations to maintain our qualification as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the Code), and generally are not subject to federal income tax to the extent we currently distribute our income to our stockholders and maintain our qualification as a REIT. We remain subject to state and local taxes on our income and property and to U.S. federal income and excise taxes on our undistributed income. As of December 31, 2023, we owned 569 buildings in 41 states with approximately 112.3 million rentable square feet, consisting of 493 warehouse/distribution buildings, 70 light manufacturing buildings, one flex/office building, and five Value Add Portfolio buildings. In addition, as of December 31, 2023, we had six development projects (which are not included in the building count noted above). While the majority of our portfolio consists of single-tenant properties, we also own a growing number of multi-tenant properties. As of December 31, 2023, our buildings were approximately 98.2% leased, with no single tenant accounting for more than approximately 2.9% of our total annualized base rental revenue and no single industry accounting for more than approximately 11.0% of our total annualized base rental revenue. We intend to maintain a diversified mix of tenants to limit our exposure to any single tenant or industry. As of December 31, 2023, our Operating Portfolio was approximately 98.4% leased. SL Rent Change on new and renewal leases together grew approximately 44.0% and 24.3% during the years ended December 31, 2023 and 2022, respectively, and our Cash Rent Change on new and renewal leases together grew approximately 31.0% and 14.3% during the years ended December 31, 2023 and 2022, respectively. We have fully integrated acquisition, leasing and operations platforms led by a senior management team with decades of industrial real estate experience. Our mission is to deliver attractive long-term stockholder returns in all market environments by growing cash flow through disciplined investment in high-quality real estate while maintaining a strong balance sheet.

About Diversified Healthcare Trust

DHC is a real estate investment trust, or REIT, focused on owning high-quality healthcare properties located throughout the United States. DHC seeks diversification across the health services spectrum by care delivery and practice type, by scientific research disciplines and by property type and location. As of December 31, 2023, DHC's approximately $7.2 billion portfolio included 371 properties in 36 states and Washington, D.C., occupied by approximately 500 tenants, and totaling approximately 8.6 million square feet of life science and medical office properties and more than 27,000 senior living units. DHC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023 and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. DHC is headquartered in Newton, MA.