Investors are closely examining the financial performance of two small-cap finance companies, BRT Apartments (NYSE:BRT) and Safehold (NYSE:SAFE). Both companies operate in the real estate sector, but they exhibit contrasting financial profiles that could influence investment decisions.
Dividend Performance
When it comes to dividends, BRT Apartments stands out with an annual dividend of $1.00 per share, resulting in a yield of 6.6%. In contrast, Safehold offers a lower annual dividend of $0.71 per share, with a yield of 5.2%. Notably, BRT Apartments has a high payout ratio of 196.1% of its earnings, while Safehold maintains a more sustainable payout ratio of 45.2%. This indicates that while BRT Apartments provides a higher yield, it may not be as financially stable in the long term.
Institutional Ownership and Valuation
A significant factor in assessing a company’s stability is its institutional ownership. Approximately 29.1% of BRT Apartments’ shares are held by institutional investors, whereas a remarkable 70.4% of Safehold’s shares are owned by these entities. This suggests a strong endorsement from major financial entities, indicating confidence in Safehold’s long-term performance.
From a valuation perspective, Safehold leads with higher revenue and earnings compared to BRT Apartments. However, BRT Apartments is currently trading at a lower price-to-earnings ratio, suggesting it may be the more affordable option in the market.
Analyst recommendations provide further insights into investor sentiment. According to MarketBeat.com, BRT Apartments has a consensus target price of $19.75, indicating a potential upside of 30.62%. Meanwhile, Safehold has a consensus target price of $19.22, suggesting a more attractive potential upside of 39.70%. Analysts appear to favor Safehold, highlighting its stronger growth prospects.
Risk Assessment and Profitability
Risk is another critical aspect to consider. BRT Apartments has a beta of 0.97, indicating it is slightly less volatile than the S&P 500 index. Conversely, Safehold has a beta of 1.85, suggesting it is significantly more volatile. This higher volatility may appeal to risk-tolerant investors seeking potentially higher returns.
In terms of profitability, metrics such as net margins, return on equity, and return on assets further differentiate these companies. Safehold outperforms BRT Apartments in several key profitability measures, reflecting its strong operational efficiency.
In summary, Safehold appears to outperform BRT Apartments across multiple financial metrics, including institutional ownership, earnings, and analyst recommendations. While BRT Apartments offers a higher dividend yield, the sustainability of its payouts and overall financial health may be a concern for long-term investors.
Company Profiles
Founded in June 1972, BRT Apartments Corp. is a real estate investment trust (REIT) focused on multi-family properties. Headquartered in Great Neck, New York, the company has built a solid reputation in property ownership and operations.
On the other hand, Safehold Inc. is redefining real estate ownership by specializing in modern ground leases. Since its inception in 2017, Safehold has aimed to help property owners unlock the value of their land, thus generating higher returns with reduced risk. As a REIT, Safehold focuses on delivering safe, growing income and long-term capital appreciation to its shareholders.
Investors should carefully weigh the strengths and weaknesses of both companies before making investment decisions, considering factors such as dividends, institutional support, and overall financial stability.
