Safehold (NYSE:SAFE) & OUTFRONT Media (NYSE:OUT) Financial Review

OUTFRONT Media (NYSE:OUT) and Safehold (NYSE:SAFE) are both real estate companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Profitability

This table compares OUTFRONT Media and Safehold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OUTFRONT Media	12.66%	37.44%	4.65%
Safehold	27.70%	4.76%	1.62%

Analyst Recommendations

This is a summary of current ratings and target prices for OUTFRONT Media and Safehold, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OUTFRONT Media	0	1	6	0	2.86
Safehold	1	6	3	0	2.20

OUTFRONT Media presently has a consensus target price of $34.00, suggesting a potential upside of 13.33%. Safehold has a consensus target price of $18.71, suggesting a potential upside of 21.05%. Given Safehold’s higher probable upside, analysts clearly believe Safehold is more favorable than OUTFRONT Media.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OUTFRONT Media	$1.83 billion	2.88	$147.00 million	$1.39	21.58
Safehold	$385.55 million	2.84	$114.47 million	$1.62	9.54

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

Volatility and Risk

OUTFRONT Media has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500. Comparatively, Safehold has a beta of 1.75, suggesting that its share price is 75% more volatile than the S&P 500.

Dividends

OUTFRONT Media pays an annual dividend of $1.20 per share and has a dividend yield of 4.0%. Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 4.6%. OUTFRONT Media pays out 86.3% 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 43.8% of its earnings in the form of a dividend. Safehold has raised its dividend for 1 consecutive years. Safehold is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

70.4% of Safehold shares are owned by institutional investors. 0.5% of OUTFRONT Media shares are owned by company insiders. Comparatively, 3.8% of Safehold shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Safehold beats OUTFRONT Media on 9 of the 17 factors compared between the two stocks.

About OUTFRONT Media

OUTFRONT Media, Inc. leases advertising space on out-of-home advertising structures and sites. Its inventory consists of billboard displays, which are primarily located on the most heavily traveled highways & roadways, and transit advertising displays operated under exclusive multi-year contracts with municipalities in large cities across the U.S. and Canada. It operates through the U.S. Media and other segments. The U.S. Media segment includes U.S. Billboard and Transit. The company was founded in 1938 and is headquartered in New York, NY.

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.