Safehold (NYSE:SAFE – Get Free Report) and Equity Residential (NYSE:EQR – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.
Dividends
Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 4.4%. Equity Residential pays an annual dividend of $2.77 per share and has a dividend yield of 4.4%. Safehold pays out 44.4% of its earnings in the form of a dividend. Equity Residential pays out 94.5% 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 has raised its dividend for 1 consecutive years and Equity Residential has raised its dividend for 4 consecutive years. Safehold is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a breakdown of current ratings for Safehold and Equity Residential, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Safehold | 1 | 6 | 4 | 1 | 2.42 |
| Equity Residential | 0 | 13 | 6 | 0 | 2.32 |
Institutional & Insider Ownership
70.4% of Safehold shares are held by institutional investors. Comparatively, 92.7% of Equity Residential shares are held by institutional investors. 3.5% of Safehold shares are held by insiders. Comparatively, 1.0% of Equity Residential shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Risk and Volatility
Safehold has a beta of 1.86, suggesting that its share price is 86% more volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.
Valuation & Earnings
This table compares Safehold and Equity Residential”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Safehold | $385.55 million | 2.99 | $114.47 million | $1.60 | 10.06 |
| Equity Residential | $3.09 billion | 7.80 | $1.12 billion | $2.93 | 21.66 |
Equity Residential has higher revenue and earnings than Safehold. Safehold is trading at a lower price-to-earnings ratio than Equity Residential, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Safehold and Equity Residential’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Safehold | 29.69% | 4.92% | 1.67% |
| Equity Residential | 36.20% | 9.98% | 5.37% |
Summary
Equity Residential beats Safehold on 11 of the 18 factors compared between the two stocks.
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.
About Equity Residential
Equity Residential is committed to creating communities where people thrive. The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract affluent long-term renters. Equity Residential owns or has investments in 305 properties consisting of 80,683 apartment units, with an established presence in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin.
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