Critical Review: CubeSmart (NYSE:CUBE) & Medical Properties Trust (NYSE:MPW)

CubeSmart (NYSE:CUBE) and Medical Properties Trust (NYSE:MPW) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Dividends

CubeSmart pays an annual dividend of $2.04 per share and has a dividend yield of 4.2%. Medical Properties Trust pays an annual dividend of $0.32 per share and has a dividend yield of 7.4%. CubeSmart pays out 115.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Medical Properties Trust pays out -7.6% of its earnings in the form of a dividend. CubeSmart has increased its dividend for 14 consecutive years. Medical Properties Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

97.6% of CubeSmart shares are owned by institutional investors. Comparatively, 71.8% of Medical Properties Trust shares are owned by institutional investors. 1.7% of CubeSmart shares are owned by company insiders. Comparatively, 1.5% of Medical Properties Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares CubeSmart and Medical Properties Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CubeSmart	37.79%	14.33%	6.48%
Medical Properties Trust	N/A	-38.83%	-15.05%

Analyst Recommendations

This is a summary of current ratings and target prices for CubeSmart and Medical Properties Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CubeSmart	1	6	4	0	2.27
Medical Properties Trust	1	7	1	0	2.00

CubeSmart currently has a consensus target price of $51.45, suggesting a potential upside of 5.20%. Medical Properties Trust has a consensus target price of $5.50, suggesting a potential upside of 27.61%. Given Medical Properties Trust’s higher probable upside, analysts plainly believe Medical Properties Trust is more favorable than CubeSmart.

Risk and Volatility

CubeSmart has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500. Comparatively, Medical Properties Trust has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500.

Earnings & Valuation

This table compares CubeSmart and Medical Properties Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CubeSmart	$1.05 billion	10.53	$410.76 million	$1.77	27.63
Medical Properties Trust	$871.80 million	2.97	-$556.48 million	($4.22)	-1.02

CubeSmart has higher revenue and earnings than Medical Properties Trust. Medical Properties Trust is trading at a lower price-to-earnings ratio than CubeSmart, indicating that it is currently the more affordable of the two stocks.

Summary

CubeSmart beats Medical Properties Trust on 13 of the 17 factors compared between the two stocks.

About CubeSmart

CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the 2023 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.

About Medical Properties Trust

Medical Properties Trust, Inc. is a self-advised real estate investment trust formed in 2003 to acquire and develop net-leased hospital facilities. From its inception in Birmingham, Alabama, the Company has grown to become one of the world's largest owners of hospital real estate with 441 facilities and approximately 44,000 licensed beds as of September 30, 2023. Since the end of the third quarter, the Company has sold four facilities and now owns approximately 43,000 licensed beds in nine countries across three continents. MPT's financing model facilitates acquisitions and recapitalizations and allows operators of hospitals to unlock the value of their real estate assets to fund facility improvements, technology upgrades and other investments in operations.