Reviewing Highlands REIT (OTCMKTS:HHDS) and Safehold (NYSE:SAFE)

Safehold (NYSE:SAFE) and Highlands REIT (OTCMKTS:HHDS) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitability and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Safehold	32.08%	4.79%	1.66%
Highlands REIT	-11.68%	-1.98%	-1.19%

Earnings & Valuation

This table compares Safehold and Highlands REIT”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Safehold	$352.58 million	3.20	-$54.97 million	$1.70	9.28
Highlands REIT	$30.98 million	2.56	-$10.30 million	N/A	N/A

Highlands REIT has lower revenue, but higher earnings than Safehold.

Volatility & Risk

Safehold has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500. Comparatively, Highlands REIT has a beta of 21.44, suggesting that its share price is 2,044% more volatile than the S&P 500.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safehold	0	5	4	0	2.44
Highlands REIT	0	0	0	0	0.00

Safehold presently has a consensus target price of $26.00, suggesting a potential upside of 64.86%. Given Safehold’s stronger consensus rating and higher possible upside, equities analysts clearly believe Safehold is more favorable than Highlands REIT.

Institutional and Insider Ownership

70.4% of Safehold shares are held by institutional investors. Comparatively, 0.0% of Highlands REIT shares are held by institutional investors. 3.3% of Safehold shares are held by company insiders. Comparatively, 3.7% of Highlands REIT shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Safehold beats Highlands REIT on 9 of the 12 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 Highlands REIT

We are a self-advised and self-administered real estate investment trust (REIT) created to own and manage substantially all of the non-core investment properties previously owned and managed by our former parent, InvenTrust Properties Corp., a Maryland corporation (InvenTrust). On April 28, 2016, we were spun-off from InvenTrust through a pro rata distribution (the Distribution) by InvenTrust of 100% of the outstanding shares of our common stock to holders of InvenTrust's common stock. Prior to or concurrent with the separation, we and InvenTrust engaged in certain reorganization transactions that were designed to consolidate substantially all of InvenTrust's remaining non-core investment properties in Highlands.