Head to Head Analysis: Highlands REIT (OTCMKTS:HHDS) vs. Safehold (NYSE:SAFE)

Safehold (NYSE:SAFE) and Highlands REIT (OTCMKTS:HHDS) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Safehold and Highlands REIT, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safehold	0	5	4	0	2.44
Highlands REIT	0	0	0	0	0.00

Safehold presently has a consensus target price of $26.00, indicating a potential upside of 60.99%. Given Safehold’s stronger consensus rating and higher possible upside, equities analysts plainly believe Safehold is more favorable than Highlands REIT.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Safehold	32.08%	4.79%	1.66%
Highlands REIT	-11.68%	-1.98%	-1.19%

Institutional and Insider Ownership

70.4% of Safehold shares are owned by institutional investors. Comparatively, 0.0% of Highlands REIT shares are owned by institutional investors. 3.3% of Safehold shares are owned by company insiders. Comparatively, 3.7% of Highlands REIT shares are owned 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.

Risk and Volatility

Safehold has a beta of 1.66, meaning that its stock price is 66% more volatile than the S&P 500. Comparatively, Highlands REIT has a beta of 18.37, meaning that its stock price is 1,737% more volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Safehold	$352.58 million	3.27	-$54.97 million	$1.70	9.50
Highlands REIT	$30.98 million	1.63	-$10.30 million	N/A	N/A

Highlands REIT has lower revenue, but higher earnings than Safehold.

Summary

Safehold beats Highlands REIT on 9 of the 12 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 Highlands REIT

We are a self-advised and self-administered real estate investment trust (REIT) created to own and manage substantially all of the non-core investment properties previously owned and managed by our former parent, InvenTrust Properties Corp., a Maryland corporation (InvenTrust). On April 28, 2016, we were spun-off from InvenTrust through a pro rata distribution (the Distribution) by InvenTrust of 100% of the outstanding shares of our common stock to holders of InvenTrust's common stock. Prior to or concurrent with the separation, we and InvenTrust engaged in certain reorganization transactions that were designed to consolidate substantially all of InvenTrust's remaining non-core investment properties in Highlands.