The Macerich (NYSE:MAC) versus CareTrust REIT (NASDAQ:CTRE) Financial Analysis

The Macerich (NYSE:MAC) and CareTrust REIT (NASDAQ:CTRE) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitability.

Valuation and Earnings

This table compares The Macerich and CareTrust REIT’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The Macerich $927.46 million 1.54 $96.82 million $3.54 2.69
CareTrust REIT $163.40 million 11.28 $46.36 million $1.36 14.16

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

Risk and Volatility

The Macerich has a beta of 1.78, indicating that its share price is 78% more volatile than the S&P 500. Comparatively, CareTrust REIT has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Dividends

The Macerich pays an annual dividend of $0.60 per share and has a dividend yield of 6.3%. CareTrust REIT pays an annual dividend of $1.00 per share and has a dividend yield of 5.2%. The Macerich pays out 16.9% of its earnings in the form of a dividend. CareTrust REIT pays out 73.5% 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. The Macerich has raised its dividend for 1 consecutive years and CareTrust REIT has raised its dividend for 4 consecutive years. The Macerich is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations for The Macerich and CareTrust REIT, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Macerich 8 6 1 0 1.53
CareTrust REIT 0 3 3 1 2.71

The Macerich currently has a consensus price target of $13.00, indicating a potential upside of 36.27%. CareTrust REIT has a consensus price target of $21.71, indicating a potential upside of 12.74%. Given The Macerich’s higher probable upside, analysts clearly believe The Macerich is more favorable than CareTrust REIT.

Profitability

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

Net Margins Return on Equity Return on Assets
The Macerich 6.34% 2.00% 0.62%
CareTrust REIT 45.10% 8.74% 5.41%

Insider & Institutional Ownership

90.1% of The Macerich shares are owned by institutional investors. Comparatively, 79.3% of CareTrust REIT shares are owned by institutional investors. 2.2% of The Macerich shares are owned by insiders. Comparatively, 1.4% of CareTrust REIT shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

The Macerich Company Profile

Macerich is a fully integrated, self-managed and self-administered real estate investment trust, which focuses on the acquisition, leasing, management, development and redevelopment of regional malls throughout the United States. Macerich currently owns 51 million square feet of real estate consisting primarily of interests in 47 regional shopping centers. Macerich specializes in successful retail properties in many of the country's most attractive, densely populated markets with significant presence in the West Coast, Arizona, Chicago and the Metro New York to Washington, DC corridor. A recognized leader in sustainability, Macerich has achieved the #1 GRESB ranking in the North American Retail Sector for five straight years (2015 Â- 2019).

CareTrust REIT Company Profile

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States.

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