Head to Head Comparison: Safehold (NYSE:SAFE) & Armada Hoffler Properties (NYSE:AHRT)

Safehold (NYSE:SAFE) and Armada Hoffler Properties (NYSE:AHRT) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Dividends

Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 4.4%. Armada Hoffler Properties pays an annual dividend of $0.56 per share and has a dividend yield of 9.1%. Safehold pays out 44.4% of its earnings in the form of a dividend. Armada Hoffler Properties pays out -700.0% 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 has increased its dividend for 1 consecutive years. Armada Hoffler Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Safehold and Armada Hoffler Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Safehold	29.69%	4.92%	1.67%
Armada Hoffler Properties	0.95%	0.31%	0.08%

Earnings and Valuation

This table compares Safehold and Armada Hoffler Properties”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Safehold	$385.55 million	2.97	$114.47 million	$1.60	9.98
Armada Hoffler Properties	$285.20 million	2.25	$5.60 million	($0.08)	-77.31

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

Risk and Volatility

Safehold has a beta of 1.84, indicating that its share price is 84% more volatile than the S&P 500. Comparatively, Armada Hoffler Properties has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Safehold and Armada Hoffler Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safehold	1	6	4	0	2.27
Armada Hoffler Properties	2	2	1	1	2.17

Safehold presently has a consensus price target of $19.25, suggesting a potential upside of 20.54%. Armada Hoffler Properties has a consensus price target of $7.70, suggesting a potential upside of 24.49%. Given Armada Hoffler Properties’ higher possible upside, analysts clearly believe Armada Hoffler Properties is more favorable than Safehold.

Institutional & Insider Ownership

70.4% of Safehold shares are held by institutional investors. Comparatively, 66.3% of Armada Hoffler Properties shares are held by institutional investors. 3.8% of Safehold shares are held by insiders. Comparatively, 11.9% of Armada Hoffler Properties shares are held by 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.

Summary

Safehold beats Armada Hoffler Properties on 13 of the 18 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 Armada Hoffler Properties

Armada Hoffler Properties, Inc. (the “Company”) is a vertically integrated, self-managed real estate investment trust (“REIT”) with over four decades of experience developing, building, acquiring, and managing high-quality retail, office, and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. In addition to the ownership of the Company’s operating property portfolio, the Company develops and builds properties for its own account and through joint ventures between the Company and unaffiliated partners and also invests in development projects through real estate financing arrangements. The Company also provides general construction and development services to third-party clients. The Company’s construction and development experience includes mid- and high-rise office buildings, retail strip malls, retail power centers, multifamily apartment communities, hotels and conference centers, single- and multi-tenant industrial, distribution, and manufacturing facilities, educational, medical, and special purpose facilities, government projects, parking garages, and mixed-use town centers. The Company is the sole general partner of Armada Hoffler, L.P. (the “Operating Partnership”) and, as of March 31, 2024, owned 75.5% of the economic interest in the Operating Partnership, of which 0.1% is held as general partnership units. The operations of the Company are conducted primarily through the Operating Partnership and the wholly owned subsidiaries thereof.