Head-To-Head Review: CubeSmart (NYSE:CUBE) versus Safehold (NYSE:SAFE)

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Safehold and CubeSmart, as provided by MarketBeat.com.

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

Earnings and Valuation

This table compares Safehold and CubeSmart”s revenue, earnings per share (EPS) 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.

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%

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 raised its dividend for 1 consecutive years and CubeSmart has raised its dividend for 16 consecutive years. Safehold is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

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

Insider and Institutional Ownership

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

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.