Head to Head Review: CubeSmart (NYSE:CUBE) vs. Safehold (NYSE:SAFE)

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

Risk and Volatility

Safehold has a beta of 1.78, suggesting that its stock price is 78% more volatile than the S&P 500. Comparatively, CubeSmart has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Safehold	27.70%	4.76%	1.62%
CubeSmart	29.41%	12.35%	5.03%

Institutional & Insider Ownership

70.4% of Safehold shares are owned by institutional investors. Comparatively, 97.6% of CubeSmart shares are owned by institutional investors. 3.8% of Safehold shares are owned by insiders. Comparatively, 1.8% of CubeSmart shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Safehold pays an annual dividend of $0.70 per share and has a dividend yield of 5.8%. CubeSmart pays an annual dividend of $2.12 per share and has a dividend yield of 5.6%. Safehold pays out 43.2% of its earnings in the form of a dividend. CubeSmart pays out 146.2% 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 increased its dividend for 1 consecutive years and CubeSmart has increased its dividend for 16 consecutive years. Safehold is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Safehold	$419.53 million	2.02	$114.47 million	$1.62	7.40
CubeSmart	$1.14 billion	7.52	$333.78 million	$1.45	26.15

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Safehold and CubeSmart, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safehold	2	7	2	0	2.00
CubeSmart	0	8	6	0	2.43

Safehold presently has a consensus price target of $15.17, suggesting a potential upside of 26.45%. CubeSmart has a consensus price target of $43.18, suggesting a potential upside of 13.87%. Given Safehold’s higher possible upside, analysts clearly believe Safehold is more favorable than CubeSmart.

Summary

CubeSmart beats Safehold on 11 of the 17 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 CubeSmart

CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the 2023 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.