Service Properties Trust (NASDAQ:SVC – Get Free Report) and Safehold (NYSE:SAFE – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, analyst recommendations and dividends.
Institutional and Insider Ownership
77.6% of Service Properties Trust shares are held by institutional investors. Comparatively, 70.4% of Safehold shares are held by institutional investors. 1.4% of Service Properties Trust shares are held by company insiders. Comparatively, 3.3% of Safehold shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares Service Properties Trust and Safehold’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Service Properties Trust | $1.87 billion | 0.52 | -$32.78 million | ($0.84) | -6.95 |
| Safehold | $352.58 million | 4.69 | -$54.97 million | ($0.45) | -51.49 |
Analyst Recommendations
This is a summary of recent recommendations and price targets for Service Properties Trust and Safehold, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Service Properties Trust | 1 | 1 | 1 | 0 | 2.00 |
| Safehold | 0 | 4 | 5 | 0 | 2.56 |
Service Properties Trust presently has a consensus price target of $7.58, indicating a potential upside of 29.85%. Safehold has a consensus price target of $27.22, indicating a potential upside of 17.49%. Given Service Properties Trust’s higher possible upside, research analysts clearly believe Service Properties Trust is more favorable than Safehold.
Volatility & Risk
Service Properties Trust has a beta of 2.21, indicating that its share price is 121% more volatile than the S&P 500. Comparatively, Safehold has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500.
Dividends
Service Properties Trust pays an annual dividend of $0.80 per share and has a dividend yield of 13.7%. Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 3.1%. Service Properties Trust pays out -95.2% of its earnings in the form of a dividend. Safehold pays out -157.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Profitability
This table compares Service Properties Trust and Safehold’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Service Properties Trust | -7.29% | -11.01% | -1.84% |
| Safehold | -7.87% | 4.43% | 1.55% |
About Service Properties Trust
Service Properties Trust (Nasdaq: SVC) is a real estate investment trust with over $11 billion invested in two asset categories: hotels and service-focused retail net lease properties. As of December 31, 2023, SVC owned 221 hotels with over 37,000 guest rooms throughout the United States and in Puerto Rico and Canada, the majority of which are extended stay and select service. As of December 31, 2023, SVC also owned 752 service-focused retail net lease properties totaling approximately 13.3 million square feet throughout the United States. SVC is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with over $41 billion in assets under management as of December 31, 2023, and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. SVC is headquartered in Newton, MA.
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.
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