Head to Head Analysis: Apartment Investment and Management (NYSE:AIV) versus Safehold (NYSE:SAFE)

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

Dividends

Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 5.2%. Apartment Investment and Management pays an annual dividend of $1.01 per share and has a dividend yield of 25.3%. Safehold pays out 44.4% of its earnings in the form of a dividend. Apartment Investment and Management pays out 26.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Safehold has raised its dividend for 1 consecutive years. Apartment Investment and Management is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Safehold and Apartment Investment and Management’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%
Apartment Investment and Management	316.79%	9.05%	0.96%

Analyst Ratings

This is a summary of current ratings and target prices for Safehold and Apartment Investment and Management, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safehold	1	6	4	0	2.27
Apartment Investment and Management	1	0	1	0	2.00

Safehold currently has a consensus price target of $19.25, suggesting a potential upside of 41.27%. Apartment Investment and Management has a consensus price target of $10.00, suggesting a potential upside of 150.94%. Given Apartment Investment and Management’s higher probable upside, analysts plainly believe Apartment Investment and Management is more favorable than Safehold.

Insider and Institutional Ownership

70.4% of Safehold shares are held by institutional investors. Comparatively, 83.3% of Apartment Investment and Management shares are held by institutional investors. 3.5% of Safehold shares are held by insiders. Comparatively, 4.0% of Apartment Investment and Management shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Safehold has a beta of 1.8, meaning that its stock price is 80% more volatile than the S&P 500. Comparatively, Apartment Investment and Management has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.

Earnings and Valuation

This table compares Safehold and Apartment Investment and Management”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Safehold	$385.55 million	2.54	$114.47 million	$1.60	8.52
Apartment Investment and Management	$138.49 million	4.14	$554.01 million	$3.88	1.03

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

Summary

Apartment Investment and Management beats Safehold on 10 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 Apartment Investment and Management

Apartment Investment & Management Co. operates as a real estate investment trust that engages in the acquisition, ownership, management and redevelopment of apartment properties. The company was founded in 1975 and is headquartered in Denver, CO.