Critical Analysis: American Healthcare REIT (NYSE:AHR) & Alexandria Real Estate Equities (NYSE:ARE)

Alexandria Real Estate Equities (NYSE:ARE) and American Healthcare REIT (NYSE:AHR) are both real estate companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.

Valuation & Earnings

This table compares Alexandria Real Estate Equities and American Healthcare REIT”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alexandria Real Estate Equities	$3.03 billion	2.77	-$1.43 billion	($6.06)	-7.94
American Healthcare REIT	$2.50 billion	4.18	$69.81 million	$0.68	79.86

American Healthcare REIT has lower revenue, but higher earnings than Alexandria Real Estate Equities. Alexandria Real Estate Equities is trading at a lower price-to-earnings ratio than American Healthcare REIT, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

96.5% of Alexandria Real Estate Equities shares are owned by institutional investors. Comparatively, 16.7% of American Healthcare REIT shares are owned by institutional investors. 1.4% of Alexandria Real Estate Equities shares are owned by insiders. Comparatively, 0.7% of American Healthcare REIT shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Alexandria Real Estate Equities and American Healthcare REIT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alexandria Real Estate Equities	-36.08%	-5.21%	-2.92%
American Healthcare REIT	4.84%	3.63%	2.25%

Risk & Volatility

Alexandria Real Estate Equities has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500. Comparatively, American Healthcare REIT has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Alexandria Real Estate Equities and American Healthcare REIT, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alexandria Real Estate Equities	4	10	2	0	1.88
American Healthcare REIT	0	2	12	0	2.86

Alexandria Real Estate Equities currently has a consensus price target of $52.62, suggesting a potential upside of 9.33%. American Healthcare REIT has a consensus price target of $60.42, suggesting a potential upside of 11.26%. Given American Healthcare REIT’s stronger consensus rating and higher probable upside, analysts plainly believe American Healthcare REIT is more favorable than Alexandria Real Estate Equities.

Dividends

Alexandria Real Estate Equities pays an annual dividend of $2.88 per share and has a dividend yield of 6.0%. American Healthcare REIT pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. Alexandria Real Estate Equities pays out -47.5% of its earnings in the form of a dividend. American Healthcare REIT pays out 147.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexandria Real Estate Equities has raised its dividend for 15 consecutive years. Alexandria Real Estate Equities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

American Healthcare REIT beats Alexandria Real Estate Equities on 10 of the 17 factors compared between the two stocks.

About Alexandria Real Estate Equities

Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500 company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche since our founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative life science, agtech, and advanced technology mega campuses in AAA innovation cluster locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. Alexandria has a total market capitalization of $33.1 billion and an asset base in North America of 73.5 million SF as of December 31, 2023, which includes 42.0 million RSF of operating properties, 5.5 million RSF of Class A/A+ properties undergoing construction and one near-term project expected to commence construction in the next two years, 2.1 million RSF of priority anticipated development and redevelopment projects, and 23.9 million SF of future development projects. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in life science, agtech, and advanced technology mega campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science, agrifoodtech, climate innovation, and technology companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.

About American Healthcare REIT

Formed by the successful merger of Griffin-American Healthcare REIT III and Griffin-American Healthcare REIT IV, as well as the acquisition of the business and operations of American Healthcare Investors, American Healthcare REIT is one of the larger healthcare-focused real estate investment trusts globally with assets totaling approximately $4.2 billion in gross investment value. The company benefits from a fully integrated management platform comprised of more than one hundred experienced and skilled professionals, many of whom have worked together since 2006 and have successfully invested in and managed healthcare real estate through multiple market cycles. The management team has a proven track record, deep industry relationships and unparalleled insight into each of the company's assets having built and nurtured the company's international portfolio since its original property acquisition in 2014. The strength of the management team, coupled with the quality of the assets, has American Healthcare REIT poised to capitalize on compelling growth driven by powerful demographic trends. With its 19 million-square-foot, 312-building portfolio of medical office buildings, senior housing communities, skilled nursing facilities and integrated senior health campuses diversified across 36 states and the United Kingdom, the tri-party transaction was a critical step in ideally positioning American Healthcare REIT for a future public listing or IPO on a national stock exchange at the most opportune time. By listing the company's shares on a national exchange, we believe the company will gain greater access to attractive capital that will fuel future growth, broaden our investor base and also provide liquidity to our fellow stockholders. American Healthcare REIT, Inc. operates as a subsidiary of Griffin Capital Company, LLC.