Financial Comparison: Diversified Healthcare Trust (NASDAQ:DHC) vs. Equity LifeStyle Properties (NYSE:ELS)

Diversified Healthcare Trust (NASDAQ:DHC) and Equity LifeStyle Properties (NYSE:ELS) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.

Volatility and Risk

Diversified Healthcare Trust has a beta of 2.22, indicating that its stock price is 122% more volatile than the S&P 500. Comparatively, Equity LifeStyle Properties has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Profitability

This table compares Diversified Healthcare Trust and Equity LifeStyle Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diversified Healthcare Trust	-24.14%	-15.36%	-6.51%
Equity LifeStyle Properties	23.56%	23.71%	6.34%

Dividends

Diversified Healthcare Trust pays an annual dividend of $0.04 per share and has a dividend yield of 1.1%. Equity LifeStyle Properties pays an annual dividend of $1.91 per share and has a dividend yield of 2.7%. Diversified Healthcare Trust pays out -2.9% of its earnings in the form of a dividend. Equity LifeStyle Properties pays out 104.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Equity LifeStyle Properties has increased its dividend for 20 consecutive years. Equity LifeStyle Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Diversified Healthcare Trust and Equity LifeStyle Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diversified Healthcare Trust	1	1	1	0	2.00
Equity LifeStyle Properties	0	5	3	1	2.56

Diversified Healthcare Trust presently has a consensus price target of $4.50, indicating a potential upside of 18.73%. Equity LifeStyle Properties has a consensus price target of $71.38, indicating a potential upside of 1.95%. Given Diversified Healthcare Trust’s higher possible upside, equities research analysts plainly believe Diversified Healthcare Trust is more favorable than Equity LifeStyle Properties.

Earnings & Valuation

This table compares Diversified Healthcare Trust and Equity LifeStyle Properties”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diversified Healthcare Trust	$1.46 billion	0.62	-$293.57 million	($1.37)	-2.77
Equity LifeStyle Properties	$1.43 billion	9.13	$314.21 million	$1.83	38.26

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

Institutional and Insider Ownership

76.0% of Diversified Healthcare Trust shares are owned by institutional investors. Comparatively, 97.2% of Equity LifeStyle Properties shares are owned by institutional investors. 1.4% of Diversified Healthcare Trust shares are owned by company insiders. Comparatively, 1.4% of Equity LifeStyle Properties shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Equity LifeStyle Properties beats Diversified Healthcare Trust on 14 of the 18 factors compared between the two stocks.

About Diversified Healthcare Trust

DHC is a real estate investment trust, or REIT, 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 December 31, 2023, DHC's approximately $7.2 billion portfolio included 371 properties in 36 states and Washington, D.C., occupied by approximately 500 tenants, and totaling approximately 8.6 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 over $41 billion in assets under management as of December 31, 2023 and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. DHC is headquartered in Newton, MA.

About Equity LifeStyle Properties

We are a self-administered, self-managed real estate investment trust (REIT) with headquarters in Chicago. As of January 29, 2024, we own or have an interest in 451 properties in 35 states and British Columbia consisting of 172,465 sites.