Analyzing Iron Mountain (NYSE:IRM) and Safehold (NYSE:SAFE)

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

Institutional & Insider Ownership

70.4% of Safehold shares are held by institutional investors. Comparatively, 80.1% of Iron Mountain shares are held by institutional investors. 3.8% of Safehold shares are held by company insiders. Comparatively, 1.7% of Iron Mountain shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Safehold has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500. Comparatively, Iron Mountain has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500.

Valuation & Earnings

This table compares Safehold and Iron Mountain”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	2.41	$114.47 million	$1.62	8.11
Iron Mountain	$6.90 billion	4.93	$144.59 million	$1.40	81.64

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

Analyst Recommendations

This is a breakdown of recent ratings for Safehold and Iron Mountain, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Safehold	1	7	2	0	2.10
Iron Mountain	0	2	5	0	2.71

Safehold currently has a consensus target price of $16.83, indicating a potential upside of 28.16%. Iron Mountain has a consensus target price of $137.83, indicating a potential upside of 20.59%. Given Safehold’s higher probable upside, analysts clearly believe Safehold is more favorable than Iron Mountain.

Profitability

This table compares Safehold and Iron Mountain’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%
Iron Mountain	5.54%	-85.44%	3.30%

Dividends

Safehold pays an annual dividend of $0.71 per share and has a dividend yield of 5.4%. Iron Mountain pays an annual dividend of $3.46 per share and has a dividend yield of 3.0%. Safehold pays out 43.8% of its earnings in the form of a dividend. Iron Mountain pays out 247.1% 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 raised its dividend for 1 consecutive years and Iron Mountain has raised its dividend for 3 consecutive years. Safehold is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Iron Mountain beats Safehold on 9 of the 17 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 Iron Mountain

Iron Mountain Incorporated (NYSE: IRM) is a global leader in information management services. Founded in 1951 and trusted by more than 240,000 customers worldwide, Iron Mountain serves to protect and elevate the power of our customers’ work. Through a range of offerings including digital transformation, data centers, secure records storage, information management, asset lifecycle management, secure destruction and art storage and logistics, Iron Mountain helps businesses bring light to their dark data, enabling customers to unlock value and intelligence from their stored digital and physical assets at speed and with security, while helping them meet their environmental goals.