Head-To-Head Comparison: Safehold (NYSE:SAFE) and Equinix (NASDAQ:EQIX)

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

Risk & Volatility

Equinix has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Safehold has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500.

Profitability

This table compares Equinix and Safehold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equinix	15.64%	10.76%	3.83%
Safehold	27.70%	4.76%	1.62%

Institutional and Insider Ownership

94.9% of Equinix shares are held by institutional investors. Comparatively, 70.4% of Safehold shares are held by institutional investors. 0.3% of Equinix shares are held by insiders. Comparatively, 3.8% of Safehold shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Equinix pays an annual dividend of $20.64 per share and has a dividend yield of 1.9%. Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 4.6%. Equinix pays out 132.9% 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 pays out 43.8% of its earnings in the form of a dividend. Equinix has raised its dividend for 10 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.

Earnings and Valuation

This table compares Equinix and Safehold”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equinix	$9.80 billion	10.76	$1.35 billion	$15.53	68.85
Safehold	$385.55 million	2.81	$114.47 million	$1.62	9.45

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Equinix and Safehold, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equinix	0	4	21	2	2.93
Safehold	1	6	2	0	2.11

Equinix presently has a consensus target price of $1,196.20, suggesting a potential upside of 11.88%. Safehold has a consensus target price of $17.17, suggesting a potential upside of 12.13%. Given Safehold’s higher possible upside, analysts clearly believe Safehold is more favorable than Equinix.

Summary

Equinix beats Safehold on 12 of the 18 factors compared between the two stocks.

About Equinix

Equinix (Nasdaq: EQIX) is the world's digital infrastructure company . Digital leaders harness Equinix's trusted platform to bring together and interconnect foundational infrastructure at software speed. Equinix enables organizations to access all the right places, partners and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value, while supporting their sustainability goals.

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.