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

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

Risk & Volatility

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

Analyst Recommendations

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

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

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

Dividends

Host Hotels & Resorts pays an annual dividend of $0.80 per share and has a dividend yield of 4.8%. Welltower pays an annual dividend of $2.68 per share and has a dividend yield of 2.0%. 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. 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

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

Valuation and Earnings

This table compares Host Hotels & Resorts and Welltower”s top-line revenue, earnings per share (EPS) and valuation.

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

Host Hotels & Resorts has higher earnings, but lower revenue 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.

Insider and Institutional Ownership

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

Summary

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

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.

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.