Simon Property Group (NYSE:SPG – Get Free Report) and Diversified Healthcare Trust (NASDAQ:DHC – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.
Analyst Ratings
This is a breakdown of current ratings for Simon Property Group and Diversified Healthcare Trust, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Simon Property Group | 0 | 3 | 3 | 0 | 2.50 |
| Diversified Healthcare Trust | 0 | 0 | 1 | 0 | 3.00 |
Simon Property Group currently has a consensus price target of $128.36, suggesting a potential upside of 22.94%. Diversified Healthcare Trust has a consensus price target of $4.50, suggesting a potential upside of 145.90%. Given Diversified Healthcare Trust’s stronger consensus rating and higher possible upside, analysts clearly believe Diversified Healthcare Trust is more favorable than Simon Property Group.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Simon Property Group | $5.29 billion | 6.46 | $2.14 billion | $6.58 | 15.87 |
| Diversified Healthcare Trust | $1.28 billion | 0.34 | -$15.77 million | ($1.13) | -1.62 |
Simon Property Group has higher revenue and earnings than Diversified Healthcare Trust. Diversified Healthcare Trust is trading at a lower price-to-earnings ratio than Simon Property Group, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
84.7% of Simon Property Group shares are owned by institutional investors. Comparatively, 95.4% of Diversified Healthcare Trust shares are owned by institutional investors. 8.5% of Simon Property Group shares are owned by company insiders. Comparatively, 1.4% of Diversified Healthcare Trust shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Profitability
This table compares Simon Property Group and Diversified Healthcare Trust’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Simon Property Group | 39.63% | 63.01% | 6.53% |
| Diversified Healthcare Trust | -20.12% | -10.43% | -4.66% |
Risk & Volatility
Simon Property Group has a beta of 1.52, meaning that its share price is 52% more volatile than the S&P 500. Comparatively, Diversified Healthcare Trust has a beta of 1.94, meaning that its share price is 94% more volatile than the S&P 500.
Dividends
Simon Property Group pays an annual dividend of $7.60 per share and has a dividend yield of 7.3%. Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 2.2%. Simon Property Group pays out 115.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Diversified Healthcare Trust pays out -3.5% of its earnings in the form of a dividend. Simon Property Group has increased its dividend for 3 consecutive years. Simon Property Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Simon Property Group beats Diversified Healthcare Trust on 12 of the 17 factors compared between the two stocks.
About Simon Property Group
Simon is a real estate investment trust engaged in the ownership of premier shopping, dining, entertainment and mixed-use destinations and an S&P 100 company (Simon Property Group, NYSE: SPG). Our properties across North America, Europe and Asia provide community gathering places for millions of people every day and generate billions in annual sales.
About Diversified Healthcare Trust
DHC is a real estate investment trust focused on owning high-quality healthcare properties located throughout the United States. DHC seeks diversification across the health services spectrum by care delivery and practice type, by scientific research disciplines and by property type and location. As of June 30, 2023, DHC's approximately $7.1 billion portfolio included 376 properties in 36 states and Washington, D.C., occupied by approximately 500 tenants, and totaling approximately 9 million square feet of life science and medical office properties and more than 27,000 senior living units. DHC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with approximately $36 billion in assets under management as of June 30, 2023 and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. DHC is headquartered in Newton, MA.
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