Healthcare Realty Trust (NYSE:HR) & NNN REIT (NYSE:NNN) Critical Contrast

NNN REIT (NYSE:NNN) and Healthcare Realty Trust (NYSE:HR) are both mid-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.

Analyst Ratings

This is a summary of current recommendations for NNN REIT and Healthcare Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NNN REIT	2	10	2	0	2.00
Healthcare Realty Trust	1	4	0	0	1.80

NNN REIT currently has a consensus target price of $44.38, suggesting a potential upside of 5.40%. Healthcare Realty Trust has a consensus target price of $16.40, suggesting a potential upside of 5.40%. Given NNN REIT’s stronger consensus rating and higher possible upside, equities research analysts clearly believe NNN REIT is more favorable than Healthcare Realty Trust.

Dividends

NNN REIT pays an annual dividend of $2.32 per share and has a dividend yield of 5.5%. Healthcare Realty Trust pays an annual dividend of $1.24 per share and has a dividend yield of 8.0%. NNN REIT pays out 108.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Healthcare Realty Trust pays out -113.8% of its earnings in the form of a dividend. NNN REIT has raised its dividend for 35 consecutive years. Healthcare Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares NNN REIT and Healthcare Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NNN REIT	45.09%	9.23%	4.49%
Healthcare Realty Trust	-31.32%	-7.06%	-3.52%

Valuation and Earnings

This table compares NNN REIT and Healthcare Realty Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NNN REIT	$869.27 million	9.10	$396.83 million	$2.14	19.68
Healthcare Realty Trust	$1.27 billion	4.31	-$654.48 million	($1.09)	-14.28

NNN REIT has higher earnings, but lower revenue than Healthcare Realty Trust. Healthcare Realty Trust is trading at a lower price-to-earnings ratio than NNN REIT, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

90.0% of NNN REIT shares are owned by institutional investors. 0.8% of NNN REIT shares are owned by company insiders. Comparatively, 0.4% of Healthcare Realty Trust shares are owned by company 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.

Volatility and Risk

NNN REIT has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, Healthcare Realty Trust has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Summary

NNN REIT beats Healthcare Realty Trust on 14 of the 17 factors compared between the two stocks.

About NNN REIT

NNN REIT invests primarily in high-quality retail properties subject generally to long-term, net leases. As of December 31, 2023, the company owned 3,532 properties in 49 states with a gross leasable area of approximately 36.0 million square feet and a weighted average remaining lease term of 10.1 years. NNN is one of only three publicly traded REITs to have increased annual dividends for 34 or more consecutive years.

About Healthcare Realty Trust

Healthcare Realty Trust, Inc. provides real estate investment services. It owns, leases, manages, acquires, finances, develops, and redevelops income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States of America. The company was founded by David R. Emery in 1992 and is headquartered in Nashville, TN.