Comparing CareTrust REIT (NASDAQ:CTRE) & Franklin BSP Realty Trust (NYSE:FBRT)

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

Volatility and Risk

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

Profitability

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

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

Valuation & Earnings

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

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

CareTrust REIT has higher earnings, but lower revenue 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.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for CareTrust REIT and Franklin BSP Realty Trust, as reported by MarketBeat.

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

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

Insider and Institutional Ownership

87.8% of CareTrust REIT shares are owned by institutional investors. Comparatively, 59.9% of Franklin BSP Realty Trust shares are owned by institutional investors. 0.5% of CareTrust REIT shares are owned by company insiders. Comparatively, 0.7% of Franklin BSP Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

CareTrust REIT pays an annual dividend of $1.34 per share and has a dividend yield of 4.7%. Franklin BSP Realty Trust pays an annual dividend of $1.42 per share and has a dividend yield of 10.9%. 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. 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.

Summary

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

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.

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.