Contrasting Digital Realty Trust (NYSE:DLR) & Safehold (NYSE:SAFE)

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

Profitability

This table compares Safehold and Digital Realty Trust’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%
Digital Realty Trust	11.80%	3.34%	1.59%

Risk and Volatility

Safehold has a beta of 1.73, suggesting that its share price is 73% more volatile than the S&P 500. Comparatively, Digital Realty Trust has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Safehold and Digital Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safehold	1	7	2	0	2.10
Digital Realty Trust	0	6	25	1	2.84

Safehold presently has a consensus target price of $17.17, suggesting a potential upside of 13.61%. Digital Realty Trust has a consensus target price of $219.45, suggesting a potential upside of 16.90%. Given Digital Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Digital Realty Trust is more favorable than Safehold.

Dividends

Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 4.7%. Digital Realty Trust pays an annual dividend of $4.88 per share and has a dividend yield of 2.6%. Safehold pays out 43.8% of its earnings in the form of a dividend. Digital Realty Trust pays out 236.9% 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. Safehold is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

70.4% of Safehold shares are held by institutional investors. Comparatively, 99.7% of Digital Realty Trust shares are held by institutional investors. 3.8% of Safehold shares are held by company insiders. Comparatively, 0.2% of Digital Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Safehold and Digital Realty Trust”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	2.78	$114.47 million	$1.62	9.33
Digital Realty Trust	$6.11 billion	11.39	$1.31 billion	$2.06	91.13

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

Summary

Digital Realty Trust beats Safehold on 10 of the 18 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 Digital Realty Trust

Digital Realty Trust, Inc. operates as a real estate investment trust, which engages in the provision of data center, colocation and interconnection solutions. It serves the following industries: artificial intelligence (AI), networks, cloud, digital media, mobile, financial services, healthcare, and gaming. The company was founded on March 9, 2004, and is headquartered in Dallas, TX.