Safehold Inc. (SAFE) stock analysis

P/E below its 5-year median

Safehold's P/E of 6.5 is below its own 5-year median of 12.2.

P/E below the industry

Safehold's P/E of 6.5 is below the Miscellaneous Investing median of 26.3.

EV/EBITDA below its 5-year median

Safehold's EV/EBITDA of 7.7 is below its 5-year median of 12.1.

P/B below the industry

Safehold's price-to-book of 0.30 is below the Miscellaneous Investing median of 1.20.

Trading below fair value

The share price of $10.48 is below our fair value estimate of $25.96.

Margin of safety over 20%

The price is 59.6% below fair value, more than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 12.6% a year over the last three fiscal years.

EPS growing under 10% a year

Diluted EPS grew -9.8% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 16.5% over the last twelve months; the Miscellaneous Investing median is 4.6%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin improving

Gross margin was 99.1% over the last twelve months, against 98.8% a year earlier.

Return on equity under 15%

Return on equity was 4.8% over the last twelve months and averaged 4.9% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 4.4%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Safehold's return on equity of 4.8% is above the Miscellaneous Investing median of 3.1%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was 26.2% over the last twelve months, against a 5-year average of 26.4%.

Net margin above the industry

Safehold's net margin of 26.2% is above the Miscellaneous Investing median of 10.3%.

No debt

Safehold has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term liquidity

The balance sheet is not split into current and non-current items.

Elevated bankruptcy risk

The Altman Z-score is 0.23; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Safehold paid dividends worth 6.8% of the share price over the last twelve months.

Yield above Treasuries

The 6.8% yield is above the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; Safehold yields 6.8%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 8 fiscal years.

Covered by earnings

Dividends take 44.1% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.