Safehold Inc. (NYSE: SAFE)

Sector: Real Estate Industry: REIT - Diversified CIK: 0001095651
Market Cap 1.15 Bn
P/B 0.48
P/E 10.07
P/S 2.99
ROIC (Qtr) 1.49
Div Yield % 4.41
Rev 1y % (Qtr) 6.53
Total Debt (Qtr) 4.59 Bn
Debt/Equity (Qtr) 1.90
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About

Investment thesis

Bull case

  • Operating cash flow of 47.81M provides exceptional 296.98x coverage of minority interest expenses 161000, showing strong core operations.
  • Cash position of 30.74M provides exceptional 190.91x coverage of minority interest expenses 161000, indicating strong liquidity.
  • Operating cash flow of 47.81M provides strong 3.89x coverage of operating expenses 12.31M, showing operational efficiency.
  • Strong free cash flow of 51.92M provides 0.96x coverage of SG&A expenses 54.34M, indicating efficient cost management.
  • Free cash flow of 51.92M provides solid 4.22x coverage of operating expenses 12.31M, showing operational efficiency.

Bear case

  • Operating cash flow of 47.81M barely covers its investment activities of (237.18M), with a coverage ratio of -0.20, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 47.81M provides thin coverage of dividend payments of (50.92M) with a -0.94 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • The company's operating cash flow of 47.81M shows concerning coverage of stock compensation expenses of 12.55M, with a 3.81 ratio indicating potential earnings quality issues.
  • Free cash flow of 51.92M provides weak coverage of capital expenditures of (4.11M), with a -12.64 ratio suggesting additional external financing needs for growth initiatives.
  • Free cash flow of 51.92M represents just 0.11x of debt issuance 487.93M, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments Breakdown of Revenue (2020)

Segments Breakdown of Revenue (2020)

Peer comparison

Companies in the REIT - Diversified
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 VICI Vici Properties Inc. 30.39 Bn 11.76 8.24 16.76 Bn
2 WPC W. P. Carey Inc. 16.39 Bn 35.15 9.55 8.72 Bn
3 BNL Broadstone Net Lease, Inc. 2.77 Bn 40.51 8.39 2.34 Bn
4 SAFE Safehold Inc. 1.15 Bn 10.07 2.99 4.59 Bn
5 AAT American Assets Trust, Inc. 1.13 Bn 20.37 2.60 1.69 Bn
6 ESRT Empire State Realty Trust, Inc. 0.91 Bn 16.82 1.33 2.06 Bn
7 CTO CTO Realty Growth, Inc. 0.60 Bn 6,383.33 35.13 0.60 Bn
8 GNL Global Net Lease, Inc. 0.57 Bn 11.86 2.57 2.93 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.78 0.68
EV to Cash from Ops. EV/CFO 118.07 -30.44
EV to Debt EV to Debt 1.23 1.31
EV to EBIT EV/EBIT 48.08 52.23
EV to EBITDA EV/EBITDA 48.66 6.51
EV to Free Cash Flow [EV/FCF] EV/FCF 108.73 21.01
EV to Market Cap EV to Market Cap 4.90 6.71
EV to Revenue EV/Rev 14.64 9.65
Price to Book Value [P/B] P/B 0.48 0.98
Price to Earnings [P/E] P/E 10.07 385.22
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.25 -1.16
Dividend Payout Ratio % Div Payout % (Qtr) 44.20 90.61
Dividend per Basic Share Div per Share (Qtr) 0.71 1.00
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 97.79 -0.65
Interest Coverage Interest Coverage 0.00 0.73
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -47.43 -246.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 79.55 49.26
Dividend Growth (1y) % Div 1y % (Qtr) -0.42 2.40
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 8.23 -20.77
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 8.91 -2.00
EBIT Growth (1y) % EBIT 1y % (Qtr) 7.50 -20.80
EBT Growth (1y) % EBT 1y % (Qtr) 7.50 -13.26
EPS Growth (1y) % EPS 1y % (Qtr) 8.11 -38.39
FCF Growth (1y) % FCF 1y % (Qtr) 13.69 -62.73
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.54 -1.85
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.05 0.11
Cash Payout Ratio Cash Payout (Qtr) 1.17 0.34
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 1.90 0.82
Interest Cover Ratio Interest Cover Ratio 0.00 0.73
Times Interest Earned Times Interest Earned 0.00 0.73
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 32.70 38.58
EBIT Margin % EBIT Margin % (Qtr) 30.45 10.26
EBT Margin % EBT Margin % (Qtr) 30.45 -13.89
Gross Margin % Gross Margin % (Qtr) 45.20 59.91
Net Profit Margin % Net Margin % (Qtr) 29.70 -17.09