Contrasting Equinix (NASDAQ:EQIX) and Safehold (NYSE:SAFE)

Safehold (NYSE:SAFE) and Equinix (NASDAQ:EQIX) are both real estate companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Safehold	27.70%	4.76%	1.62%
Equinix	15.64%	10.76%	3.83%

Dividends

Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 4.7%. Equinix pays an annual dividend of $20.64 per share and has a dividend yield of 1.9%. Safehold pays out 43.8% of its earnings in the form of a dividend. Equinix pays out 132.9% 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 has increased its dividend for 1 consecutive years and Equinix has increased its dividend for 10 consecutive years. Safehold is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent ratings for Safehold and Equinix, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safehold	1	6	2	0	2.11
Equinix	0	4	21	2	2.93

Safehold currently has a consensus price target of $17.17, indicating a potential upside of 14.83%. Equinix has a consensus price target of $1,202.20, indicating a potential upside of 9.53%. Given Safehold’s higher possible upside, research analysts plainly believe Safehold is more favorable than Equinix.

Earnings and Valuation

This table compares Safehold and Equinix”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Safehold	$385.55 million	2.75	$114.47 million	$1.62	9.23
Equinix	$9.22 billion	11.75	$1.35 billion	$15.53	70.68

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

Institutional and Insider Ownership

70.4% of Safehold shares are owned by institutional investors. Comparatively, 94.9% of Equinix shares are owned by institutional investors. 3.8% of Safehold shares are owned by insiders. Comparatively, 0.3% of Equinix shares are owned 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.

Risk & Volatility

Safehold has a beta of 1.75, suggesting that its share price is 75% more volatile than the S&P 500. Comparatively, Equinix has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.

Summary

Equinix beats Safehold on 12 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 Equinix

Equinix (Nasdaq: EQIX) is the world's digital infrastructure company . Digital leaders harness Equinix's trusted platform to bring together and interconnect foundational infrastructure at software speed. Equinix enables organizations to access all the right places, partners and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value, while supporting their sustainability goals.