Realty Income vs Ventas Which Outperforms?

Realty Income and Ventas are both prominent real estate investment trusts (REITs) in the United States. Realty Income is known for its focus on owning and leasing freestanding retail properties, while Ventas specializes in healthcare and senior housing facilities. Both companies offer investors the opportunity to generate passive income through regular dividends and have a track record of consistent performance. However, their individual strategies and market sectors may appeal to different types of investors based on their investment goals and risk tolerance.

Realty Income or Ventas?

When comparing Realty Income and Ventas, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Realty Income and Ventas.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Realty Income has a dividend yield of 5.41%, while Ventas has a dividend yield of 2.78%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Realty Income reports a 5-year dividend growth of 3.00% year and a payout ratio of 291.48%. On the other hand, Ventas reports a 5-year dividend growth of -10.66% year and a payout ratio of -854.51%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Realty Income P/E ratio at 57.07 and Ventas's P/E ratio at -313.52. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Realty Income P/B ratio is 1.31 while Ventas's P/B ratio is 2.75.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Realty Income has seen a 5-year revenue growth of 0.28%, while Ventas's is 0.06%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Realty Income's ROE at 2.36% and Ventas's ROE at -0.90%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $57.49 for Realty Income and $64.64 for Ventas. Over the past year, Realty Income's prices ranged from $49.52 to $64.88, with a yearly change of 31.02%. Ventas's prices fluctuated between $41.45 and $67.61, with a yearly change of 63.11%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.