Western Asset Mortgage Capital (NYSE:WMC) vs. Senior Housing Properties Trust (NYSE:SNH) Financial Survey

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Senior Housing Properties Trust (NASDAQ:SNH) and Western Asset Mortgage Capital (NYSE:WMC) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Profitability

This table compares Senior Housing Properties Trust and Western Asset Mortgage Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Senior Housing Properties Trust 7.31% 0.59% 0.27%
Western Asset Mortgage Capital 13.99% 11.99% 1.22%

Valuation & Earnings

This table compares Senior Housing Properties Trust and Western Asset Mortgage Capital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Senior Housing Properties Trust $1.12 billion 1.69 $286.87 million $1.59 4.98
Western Asset Mortgage Capital $209.36 million 2.56 $26.41 million $1.36 7.40

Senior Housing Properties Trust has higher revenue and earnings than Western Asset Mortgage Capital. Senior Housing Properties Trust is trading at a lower price-to-earnings ratio than Western Asset Mortgage Capital, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

71.1% of Senior Housing Properties Trust shares are owned by institutional investors. Comparatively, 42.3% of Western Asset Mortgage Capital shares are owned by institutional investors. 1.3% of Senior Housing Properties Trust shares are owned by insiders. Comparatively, 0.5% of Western Asset Mortgage Capital shares are owned by 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.

Dividends

Senior Housing Properties Trust pays an annual dividend of $0.60 per share and has a dividend yield of 7.6%. Western Asset Mortgage Capital pays an annual dividend of $1.24 per share and has a dividend yield of 12.3%. Senior Housing Properties Trust pays out 37.7% of its earnings in the form of a dividend. Western Asset Mortgage Capital pays out 91.2% 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 Recommendations

This is a breakdown of current ratings and recommmendations for Senior Housing Properties Trust and Western Asset Mortgage Capital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Senior Housing Properties Trust 3 0 3 0 2.00
Western Asset Mortgage Capital 0 1 0 0 2.00

Senior Housing Properties Trust currently has a consensus price target of $14.25, suggesting a potential upside of 79.92%. Western Asset Mortgage Capital has a consensus price target of $10.50, suggesting a potential upside of 4.37%. Given Senior Housing Properties Trust’s higher probable upside, research analysts plainly believe Senior Housing Properties Trust is more favorable than Western Asset Mortgage Capital.

Volatility & Risk

Senior Housing Properties Trust has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Western Asset Mortgage Capital has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.

Summary

Senior Housing Properties Trust beats Western Asset Mortgage Capital on 8 of the 15 factors compared between the two stocks.

Senior Housing Properties Trust Company Profile

SNH is a real estate investment trust, or REIT, that owns medical office and life science properties, senior living communities and wellness centers throughout the United States. SNH is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), or RMR Inc., an alternative asset management company that is headquartered in Newton, MA.

Western Asset Mortgage Capital Company Profile

Western Asset Mortgage Capital Corporation operates as a real estate investment trust in the United States. It focuses on investing in, financing, and managing a portfolio of agency and non-agency residential mortgage-backed securities and commercial mortgage-backed securities, residential whole-loans, residential bridge loans, securitized commercial loans, and other financial assets. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was founded in 2009 and is based in Pasadena, California.

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