Contrasting Saul Centers (NYSE:BFS) & Safehold (NYSE:SAFE)

Saul Centers (NYSE:BFS) and Safehold (NYSE:SAFE) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a summary of current ratings and price targets for Saul Centers and Safehold, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Saul Centers	0	0	1	0	3.00
Safehold	0	4	4	0	2.50

Saul Centers currently has a consensus price target of $45.50, indicating a potential upside of 21.50%. Safehold has a consensus price target of $26.88, indicating a potential upside of 58.37%. Given Safehold’s higher possible upside, analysts clearly believe Safehold is more favorable than Saul Centers.

Dividends

Saul Centers pays an annual dividend of $2.36 per share and has a dividend yield of 6.3%. Safehold pays an annual dividend of $0.70 per share and has a dividend yield of 4.1%. Saul Centers pays out 128.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Safehold pays out 41.2% of its earnings in the form of a dividend.

Insider and Institutional Ownership

50.0% of Saul Centers shares are held by institutional investors. Comparatively, 70.4% of Safehold shares are held by institutional investors. 56.6% of Saul Centers shares are held by company insiders. Comparatively, 3.3% of Safehold shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Saul Centers and Safehold”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Saul Centers	$267.61 million	3.38	$52.69 million	$1.84	20.35
Safehold	$376.84 million	3.22	-$54.97 million	$1.70	9.98

Saul Centers has higher earnings, but lower revenue than Safehold. Safehold is trading at a lower price-to-earnings ratio than Saul Centers, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Saul Centers and Safehold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Saul Centers	20.84%	17.16%	2.72%
Safehold	32.08%	4.79%	1.66%

Volatility & Risk

Saul Centers has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Safehold has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500.

Summary

Saul Centers beats Safehold on 9 of the 16 factors compared between the two stocks.

About Saul Centers

Saul Centers is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a real estate portfolio comprised of 61 properties that includes (a) 57 community and neighborhood Shopping Centers and Mixed-Use properties with approximately 9.8 million square feet of leasable area and (b) four land and development properties. Over 85% of the Company’s property operating income is generated from properties in the metropolitan Washington, DC/Baltimore area.

About Safehold

Safehold Inc. (NYSE: SAFE) is revolutionizing real estate ownership by providing a new and better way for owners to unlock the value of the land beneath their buildings. Having created the modern ground lease industry in 2017, Safehold continues to help owners of high quality multifamily, office, industrial, hospitality, student housing, life science and mixed-use properties generate higher returns with less risk. The Company, which is taxed as a real estate investment trust (REIT), seeks to deliver safe, growing income and long-term capital appreciation to its shareholders.