Analyzing Host Hotels & Resorts (NASDAQ:HST) and Welltower (NYSE:WELL)

Welltower (NYSE:WELL) and Host Hotels & Resorts (NASDAQ:HST) are both large-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, earnings, institutional ownership and profitability.

Analyst Ratings

This is a summary of recent ratings for Welltower and Host Hotels & Resorts, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Welltower	0	4	8	2	2.86
Host Hotels & Resorts	1	3	8	0	2.58

Welltower presently has a consensus price target of $134.96, indicating a potential downside of 1.12%. Host Hotels & Resorts has a consensus price target of $20.96, indicating a potential upside of 25.42%. Given Host Hotels & Resorts’ higher possible upside, analysts clearly believe Host Hotels & Resorts is more favorable than Welltower.

Institutional and Insider Ownership

94.8% of Welltower shares are owned by institutional investors. Comparatively, 98.5% of Host Hotels & Resorts shares are owned by institutional investors. 0.1% of Welltower shares are owned by insiders. Comparatively, 1.3% of Host Hotels & Resorts shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Welltower has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500. Comparatively, Host Hotels & Resorts has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Earnings and Valuation

This table compares Welltower and Host Hotels & Resorts”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Welltower	$6.64 billion	12.80	$340.09 million	$1.52	89.80
Host Hotels & Resorts	$5.31 billion	2.20	$740.00 million	$1.03	16.22

Host Hotels & Resorts has lower revenue, but higher earnings than Welltower. Host Hotels & Resorts is trading at a lower price-to-earnings ratio than Welltower, indicating that it is currently the more affordable of the two stocks.

Dividends

Welltower pays an annual dividend of $2.68 per share and has a dividend yield of 2.0%. Host Hotels & Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 4.8%. Welltower pays out 176.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Host Hotels & Resorts pays out 77.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Host Hotels & Resorts is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Welltower and Host Hotels & Resorts’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Welltower	12.22%	3.20%	2.00%
Host Hotels & Resorts	12.92%	10.72%	5.75%

Summary

Host Hotels & Resorts beats Welltower on 10 of the 16 factors compared between the two stocks.

About Welltower

Welltower Inc. (NYSE:WELL), a real estate investment trust (“REIT”) and S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. Welltower invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.

About Host Hotels & Resorts

Host Hotels & Resorts, Inc. is a real estate investment trust, which engages in the management of luxury and upper-upscale hotels. It operates through the following geographical segments: United States, Brazil, and Canada. The company was founded in 1927 and is headquartered in Bethesda, MD.