Head-To-Head Analysis: Franklin Street Properties (NYSE:FSP) vs. Healthcare Realty Trust (NYSE:HR)

Franklin Street Properties (NYSE:FSP) and Healthcare Realty Trust (NYSE:HR) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, risk and dividends.

Insider and Institutional Ownership

61.4% of Franklin Street Properties shares are owned by institutional investors. 6.2% of Franklin Street Properties shares are owned by insiders. Comparatively, 0.6% of Healthcare Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Franklin Street Properties has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Healthcare Realty Trust has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Profitability

This table compares Franklin Street Properties and Healthcare Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Street Properties	-32.11%	-5.88%	-3.87%
Healthcare Realty Trust	-45.63%	-9.42%	-4.90%

Dividends

Franklin Street Properties pays an annual dividend of $0.04 per share and has a dividend yield of 2.1%. Healthcare Realty Trust pays an annual dividend of $1.24 per share and has a dividend yield of 7.3%. Franklin Street Properties pays out -10.3% of its earnings in the form of a dividend. Healthcare Realty Trust pays out -78.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Healthcare Realty Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Franklin Street Properties and Healthcare Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Street Properties	0	0	0	0	0.00
Healthcare Realty Trust	1	5	0	0	1.83

Healthcare Realty Trust has a consensus target price of $17.50, indicating a potential upside of 3.67%. Given Healthcare Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Healthcare Realty Trust is more favorable than Franklin Street Properties.

Earnings and Valuation

This table compares Franklin Street Properties and Healthcare Realty Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Street Properties	$126.51 million	1.56	-$48.11 million	($0.39)	-4.90
Healthcare Realty Trust	$1.29 billion	4.64	-$278.26 million	($1.58)	-10.68

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

Summary

Franklin Street Properties beats Healthcare Realty Trust on 8 of the 15 factors compared between the two stocks.

About Franklin Street Properties

Franklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes.

About Healthcare Realty Trust

Healthcare Realty (NYSE: HR) is a real estate investment trust (REIT) that owns and operates medical outpatient buildings primarily located around market-leading hospital campuses. The Company selectively grows its portfolio through property acquisition and development. As the first and largest REIT to specialize in medical outpatient buildings, Healthcare Realty's portfolio includes more than 700 properties totaling over 40 million square feet concentrated in 15 growth markets.