Head to Head Contrast: Safehold (NYSE:SAFE) and Lamar Advertising (NASDAQ:LAMR)

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

Institutional and Insider Ownership

93.8% of Lamar Advertising shares are held by institutional investors. Comparatively, 70.4% of Safehold shares are held by institutional investors. 15.2% of Lamar Advertising shares are held by insiders. Comparatively, 3.8% of Safehold shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lamar Advertising	23.90%	54.94%	8.04%
Safehold	27.70%	4.76%	1.62%

Volatility and Risk

Lamar Advertising has a beta of 1.19, meaning that its share price is 19% more 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.

Dividends

Lamar Advertising pays an annual dividend of $6.40 per share and has a dividend yield of 4.1%. Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 4.6%. 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 pays out 43.8% of its earnings in the form of a dividend. Lamar Advertising has increased its dividend for 5 consecutive years and Safehold has increased its dividend for 1 consecutive years. Safehold is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings for Lamar Advertising and Safehold, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lamar Advertising	0	3	2	0	2.40
Safehold	1	6	2	0	2.11

Lamar Advertising currently has a consensus price target of $160.17, indicating a potential upside of 3.71%. Safehold has a consensus price target of $17.17, indicating a potential upside of 12.05%. Given Safehold’s higher probable upside, analysts clearly believe Safehold is more favorable than Lamar Advertising.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lamar Advertising	$2.27 billion	6.92	$587.15 million	$5.48	28.18
Safehold	$385.55 million	2.81	$114.47 million	$1.62	9.46

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.

Summary

Lamar Advertising beats Safehold on 11 of the 16 factors compared between the two stocks.

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.

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.