Comparing Safehold (NYSE:SAFE) and Public Storage (NYSE:PSA)

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

Volatility & Risk

Public Storage has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, Safehold has a beta of 1.78, indicating that its stock price is 78% more volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Public Storage	$4.82 billion	11.42	$1.78 billion	$10.48	29.94
Safehold	$419.53 million	1.88	$114.47 million	$1.62	6.88

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Public Storage and Safehold, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Public Storage	0	14	7	0	2.33
Safehold	1	10	2	0	2.08

Public Storage presently has a consensus price target of $323.42, suggesting a potential upside of 3.07%. Safehold has a consensus price target of $14.17, suggesting a potential upside of 27.18%. Given Safehold’s higher possible upside, analysts plainly believe Safehold is more favorable than Public Storage.

Profitability

This table compares Public Storage and Safehold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Public Storage	41.80%	40.98%	10.19%
Safehold	27.70%	4.76%	1.62%

Dividends

Public Storage pays an annual dividend of $12.00 per share and has a dividend yield of 3.8%. Safehold pays an annual dividend of $0.70 per share and has a dividend yield of 6.3%. Public Storage pays out 114.5% 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 pays out 43.2% of its earnings in the form of a dividend. Safehold has increased its dividend for 1 consecutive years. Safehold is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

78.8% of Public Storage shares are held by institutional investors. Comparatively, 70.4% of Safehold shares are held by institutional investors. 11.1% of Public Storage shares are held by insiders. Comparatively, 3.8% of Safehold shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Public Storage beats Safehold on 12 of the 17 factors compared between the two stocks.

About Public Storage

Public Storage, a member of the S&P 500 and FT Global 500, is a REIT that primarily acquires, develops, owns, and operates self-storage facilities. At December 31, 2023, we had: (i) interests in 3,044 self-storage facilities located in 40 states with approximately 218 million net rentable square feet in the United States and (ii) a 35% common equity interest in Shurgard Self Storage Limited (Euronext Brussels: SHUR), which owned 275 self-storage facilities located in seven Western European nations with approximately 15 million net rentable square feet operated under the Shurgard brand. Our headquarters are located in Glendale, California.

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.