Head-To-Head Analysis: Alexander & Baldwin (NYSE:ALEX) vs. Safehold (NYSE:SAFE)

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

Insider & Institutional Ownership

91.3% of Alexander & Baldwin shares are owned by institutional investors. Comparatively, 70.4% of Safehold shares are owned by institutional investors. 0.7% of Alexander & Baldwin shares are owned by company insiders. Comparatively, 3.5% of Safehold shares are owned 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.

Profitability

This table compares Alexander & Baldwin and Safehold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alexander & Baldwin	19.64%	5.93%	3.62%
Safehold	28.92%	4.76%	1.65%

Earnings & Valuation

This table compares Alexander & Baldwin and Safehold”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alexander & Baldwin	$229.18 million	5.56	$29.80 million	$0.85	20.64
Safehold	$365.69 million	3.00	$105.76 million	$1.46	10.50

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Alexander & Baldwin and Safehold, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alexander & Baldwin	0	1	2	0	2.67
Safehold	0	4	4	0	2.50

Alexander & Baldwin currently has a consensus target price of $23.00, indicating a potential upside of 31.13%. Safehold has a consensus target price of $25.25, indicating a potential upside of 64.71%. Given Safehold’s higher possible upside, analysts clearly believe Safehold is more favorable than Alexander & Baldwin.

Risk and Volatility

Alexander & Baldwin has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, Safehold has a beta of 1.86, meaning that its stock price is 86% more volatile than the S&P 500.

Dividends

Alexander & Baldwin pays an annual dividend of $0.90 per share and has a dividend yield of 5.1%. Safehold pays an annual dividend of $0.70 per share and has a dividend yield of 4.6%. Alexander & Baldwin pays out 105.9% 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 47.9% of its earnings in the form of a dividend. Alexander & Baldwin has raised its dividend for 4 consecutive years and Safehold has raised its dividend for 1 consecutive years. Alexander & Baldwin is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Safehold beats Alexander & Baldwin on 9 of the 17 factors compared between the two stocks.

About Alexander & Baldwin

Alexander & Baldwin, Inc. engages in the real estate business. It operates through the Commercial Real Estate and Land Operations segments. The Commercial Real Estate segment includes investments and acquisitions, construction and development, and in-house leasing and property management. The Land Operations segment consists of legacy landholdings, assets, and liabilities subject to the company’s simplification and monetization effort. The company was founded by Samuel Thomas Alexander and Henry Perrine Baldwin in 1870 and is headquartered in Honolulu, HI.

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.