Safehold (NYSE:SAFE – Get Free Report) and Veris Residential (NYSE:VRE – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.
Profitability
This table compares Safehold and Veris Residential’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Safehold | -5.76% | 4.64% | 1.63% |
| Veris Residential | -21.79% | -8.55% | -3.41% |
Volatility and Risk
Safehold has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500. Comparatively, Veris Residential has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Safehold | $371.70 million | 4.59 | -$54.97 million | ($0.45) | -53.07 |
| Veris Residential | $287.87 million | 5.32 | -$107.26 million | ($1.00) | -16.53 |
Safehold has higher revenue and earnings than Veris Residential. Safehold is trading at a lower price-to-earnings ratio than Veris Residential, indicating that it is currently the more affordable of the two stocks.
Dividends
Safehold pays an annual dividend of $0.70 per share and has a dividend yield of 2.9%. Veris Residential pays an annual dividend of $0.28 per share and has a dividend yield of 1.7%. Safehold pays out -155.6% of its earnings in the form of a dividend. Veris Residential pays out -28.0% 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. Safehold is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional & Insider Ownership
70.4% of Safehold shares are held by institutional investors. Comparatively, 93.0% of Veris Residential shares are held by institutional investors. 3.3% of Safehold shares are held by insiders. Comparatively, 15.0% of Veris Residential shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Analyst Ratings
This is a summary of recent ratings and price targets for Safehold and Veris Residential, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Safehold | 0 | 4 | 5 | 0 | 2.56 |
| Veris Residential | 1 | 1 | 1 | 0 | 2.00 |
Safehold presently has a consensus target price of $28.22, suggesting a potential upside of 18.18%. Veris Residential has a consensus target price of $14.33, suggesting a potential downside of 13.29%. Given Safehold’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Safehold is more favorable than Veris Residential.
Summary
Safehold beats Veris Residential on 12 of the 16 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 Veris Residential
Veris Residential, Inc. is a forward-thinking, environmentally and socially conscious real estate investment trust (REIT) that primarily owns, operates, acquires and develops holistically-inspired, Class A multifamily properties that meet the sustainability-conscious lifestyle needs of today's residents while seeking to positively impact the communities it serves and the planet at large. The company is guided by an experienced management team and Board of Directors and is underpinned by leading corporate governance principle; a best-in-class and sustainable approach to operations; and an inclusive culture based on equality and meritocratic empowerment.
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