Contrasting Mid-America Apartment Communities (NYSE:MAA) and Safehold (NYSE:SAFE)

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

Insider and Institutional Ownership

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mid-America Apartment Communities	$2.21 billion	7.25	$446.91 million	$3.30	41.71
Safehold	$385.55 million	2.88	$114.47 million	$1.59	9.75

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.

Profitability

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

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

Volatility and Risk

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Mid-America Apartment Communities and Safehold, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mid-America Apartment Communities	2	11	7	0	2.25
Safehold	2	6	3	0	2.09

Mid-America Apartment Communities presently has a consensus target price of $143.44, indicating a potential upside of 4.21%. Safehold has a consensus target price of $18.75, indicating a potential upside of 20.97%. Given Safehold’s higher probable upside, analysts plainly believe Safehold is more favorable than Mid-America Apartment Communities.

Dividends

Mid-America Apartment Communities pays an annual dividend of $6.12 per share and has a dividend yield of 4.4%. Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 4.6%. 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 pays out 44.7% of its earnings in the form of a dividend. Mid-America Apartment Communities has raised its dividend for 16 consecutive years and Safehold has raised its dividend for 1 consecutive years. Safehold is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Mid-America Apartment Communities beats Safehold on 11 of the 17 factors compared between the two stocks.

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.

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.