Safehold (NYSE:SAFE) versus Lamar Advertising (NASDAQ:LAMR) Critical Comparison

Safehold (NYSE:SAFE) and Lamar Advertising (NASDAQ:LAMR) are both real estate companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Valuation & Earnings

This table compares Safehold and Lamar Advertising”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Safehold	$385.55 million	2.99	$114.47 million	$1.62	10.06
Lamar Advertising	$2.33 billion	7.02	$587.15 million	$5.48	29.37

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

Risk and Volatility

Safehold has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500. Comparatively, Lamar Advertising has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Dividends

Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 4.4%. Lamar Advertising pays an annual dividend of $6.40 per share and has a dividend yield of 4.0%. Safehold pays out 43.8% of its earnings in the form of a dividend. Lamar Advertising pays out 116.8% 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 Lamar Advertising has raised its dividend for 5 consecutive years. Safehold is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

70.4% of Safehold shares are owned by institutional investors. Comparatively, 93.8% of Lamar Advertising shares are owned by institutional investors. 3.8% of Safehold shares are owned by insiders. Comparatively, 15.2% of Lamar Advertising shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Safehold and Lamar Advertising, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safehold	1	6	3	0	2.20
Lamar Advertising	0	3	2	0	2.40

Safehold presently has a consensus target price of $18.71, indicating a potential upside of 14.79%. Lamar Advertising has a consensus target price of $160.00, indicating a potential downside of 0.58%. Given Safehold’s higher possible upside, equities research analysts plainly believe Safehold is more favorable than Lamar Advertising.

Profitability

This table compares Safehold and Lamar Advertising’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%
Lamar Advertising	23.90%	54.94%	8.04%

Summary

Lamar Advertising 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 Lamar Advertising

Lamar Advertising Company operates as an outdoor advertising company in the United States and Canada. The company owns and operates billboards, logo signs, and transit advertising displays, as well as rents space for advertising on billboards, buses, shelters, benches, logo plates, and in airport terminals. Lamar Advertising Company was founded in 1902 and is headquartered in Baton Rouge, Louisiana.