Financial Contrast: Sun Communities (NYSE:SUI) and Safehold (NYSE:SAFE)

Sun Communities (NYSE:SUI) and Safehold (NYSE:SAFE) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, profitability, institutional ownership, dividends and valuation.

Risk and Volatility

Sun Communities has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, Safehold has a beta of 1.83, meaning that its stock price is 83% more volatile than the S&P 500.

Insider & Institutional Ownership

99.6% of Sun Communities shares are held by institutional investors. Comparatively, 70.4% of Safehold shares are held by institutional investors. 1.8% of Sun Communities shares are held by company insiders. Comparatively, 3.5% of Safehold shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Sun Communities and Safehold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sun Communities	48.86%	-0.60%	-0.29%
Safehold	27.45%	4.70%	1.61%

Dividends

Sun Communities pays an annual dividend of $4.16 per share and has a dividend yield of 3.3%. Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 4.6%. Sun Communities pays out 40.7% of its earnings in the form of a dividend. Safehold pays out 49.7% 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. Sun Communities has raised its dividend for 8 consecutive years and Safehold has raised its dividend for 1 consecutive years.

Analyst Ratings

This is a summary of current ratings and recommmendations for Sun Communities and Safehold, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sun Communities	1	8	6	0	2.33
Safehold	0	5	4	0	2.44

Sun Communities presently has a consensus price target of $138.4286, indicating a potential upside of 8.96%. Safehold has a consensus price target of $21.8889, indicating a potential upside of 41.13%. Given Safehold’s stronger consensus rating and higher possible upside, analysts plainly believe Safehold is more favorable than Sun Communities.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sun Communities	$3.22 billion	4.94	$101.80 million	$10.22	12.43
Safehold	$365.68 million	3.04	$105.76 million	$1.43	10.85

Safehold has lower revenue, but higher earnings than Sun Communities. Safehold is trading at a lower price-to-earnings ratio than Sun Communities, indicating that it is currently the more affordable of the two stocks.

Summary

Sun Communities beats Safehold on 9 of the 17 factors compared between the two stocks.

About Sun Communities

Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of December 31, 2023, the Company owned, operated, or had an interest in a portfolio of 667 developed MH, RV and Marina properties comprising 179,310 developed sites and approximately 48,030 wet slips and dry storage spaces in the U.S., the UK and Canada.

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.