Reviewing CareTrust REIT (NASDAQ:CTRE) and Franklin BSP Realty Trust (NYSE:FBRT)

Franklin BSP Realty Trust (NYSE:FBRT) and CareTrust REIT (NASDAQ:CTRE) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, dividends, valuation, earnings, analyst recommendations and profitability.

Valuation and Earnings

This table compares Franklin BSP Realty Trust and CareTrust REIT”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin BSP Realty Trust	$548.93 million	1.94	$95.88 million	$0.83	15.64
CareTrust REIT	$228.26 million	23.60	$125.08 million	$0.79	36.33

CareTrust REIT has lower revenue, but higher earnings than Franklin BSP Realty Trust. Franklin BSP Realty Trust is trading at a lower price-to-earnings ratio than CareTrust REIT, indicating that it is currently the more affordable of the two stocks.

Dividends

Franklin BSP Realty Trust pays an annual dividend of $1.42 per share and has a dividend yield of 10.9%. CareTrust REIT pays an annual dividend of $1.34 per share and has a dividend yield of 4.7%. Franklin BSP Realty Trust pays out 171.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CareTrust REIT pays out 169.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of recent recommendations for Franklin BSP Realty Trust and CareTrust REIT, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin BSP Realty Trust	0	0	5	2	3.29
CareTrust REIT	1	1	4	0	2.50

Franklin BSP Realty Trust presently has a consensus target price of $15.50, suggesting a potential upside of 19.41%. CareTrust REIT has a consensus target price of $31.00, suggesting a potential upside of 8.01%. Given Franklin BSP Realty Trust’s stronger consensus rating and higher probable upside, equities analysts clearly believe Franklin BSP Realty Trust is more favorable than CareTrust REIT.

Institutional and Insider Ownership

59.9% of Franklin BSP Realty Trust shares are held by institutional investors. Comparatively, 87.8% of CareTrust REIT shares are held by institutional investors. 0.7% of Franklin BSP Realty Trust shares are held by company insiders. Comparatively, 0.5% of CareTrust REIT shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Franklin BSP Realty Trust has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500. Comparatively, CareTrust REIT has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Profitability

This table compares Franklin BSP Realty Trust and CareTrust REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin BSP Realty Trust	45.56%	8.17%	1.70%
CareTrust REIT	42.22%	5.59%	4.39%

Summary

Franklin BSP Realty Trust beats CareTrust REIT on 11 of the 17 factors compared between the two stocks.

About Franklin BSP Realty Trust

Benefit Street Partners operates as a self-managed real estate investment trust (REIT). BSP earns income from investing in a leveraged portfolio of residential mortgage pass-through securities consisting almost exclusively of adjustable-rate mortgage (ARM) securities issued and guaranteed by government-sponsored enterprises, either Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) (together, the government-sponsored enterprises (GSEs)), or by an agency of the federal government, Government National Mortgage Association (Ginnie Mae). BSP’s investment strategy focuses on managing a portfolio of residential mortgage investments consisting almost exclusively of ARM Agency Securities. As of December 31, 2012, the Company’s securities consisted of Agency Securities classified as available-for-sale and Residential mortgage securities classified as held-to-maturity.

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.