Critical Review: Safehold (NYSE:SAFE) & Mid-America Apartment Communities (NYSE:MAA)

Safehold (NYSE:SAFE) and Mid-America Apartment Communities (NYSE:MAA) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Volatility & Risk

Safehold has a beta of 1.81, suggesting that its share price is 81% more volatile than the S&P 500. Comparatively, Mid-America Apartment Communities has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Insider & Institutional Ownership

70.4% of Safehold shares are owned by institutional investors. Comparatively, 93.6% of Mid-America Apartment Communities shares are owned by institutional investors. 3.8% of Safehold shares are owned by company insiders. Comparatively, 0.6% of Mid-America Apartment Communities shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Safehold and Mid-America Apartment Communities, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safehold	2	6	3	0	2.09
Mid-America Apartment Communities	2	10	8	0	2.30

Safehold currently has a consensus target price of $18.75, suggesting a potential upside of 16.33%. Mid-America Apartment Communities has a consensus target price of $144.19, suggesting a potential upside of 4.39%. Given Safehold’s higher possible upside, equities analysts clearly believe Safehold is more favorable than Mid-America Apartment Communities.

Earnings & Valuation

This table compares Safehold and Mid-America Apartment Communities”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Safehold	$385.55 million	2.99	$114.47 million	$1.59	10.14
Mid-America Apartment Communities	$2.21 billion	7.28	$446.91 million	$3.30	41.86

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

Dividends

Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 4.4%. Mid-America Apartment Communities pays an annual dividend of $6.12 per share and has a dividend yield of 4.4%. Safehold pays out 44.7% of its earnings in the form of a dividend. Mid-America Apartment Communities pays out 185.5% 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 Mid-America Apartment Communities has raised its dividend for 16 consecutive years. Mid-America Apartment Communities is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Safehold and Mid-America Apartment Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Safehold	28.58%	4.78%	1.61%
Mid-America Apartment Communities	17.60%	6.61%	3.26%

Summary

Mid-America Apartment Communities beats Safehold on 12 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 Mid-America Apartment Communities

Mid-America Apartment Communities, Inc. is a real estate investment trust, which engages in the operation, acquisition, and development of apartment communities. It operates through the Same Store and Non-Same Store segments. The Same Store Communities segment represents those apartment communities that have been owned and stabilized for at least 12 months as of the first day of the calendar year. The Non-Same Store segment includes recent acquisitions, communities in development or lease-up. The company was founded in 1994 and is headquartered in Germantown, TN.