Financial Comparison: Gladstone Commercial (GOOD) versus Safety (SAFE)

Gladstone Commercial (NASDAQ: GOOD) and Safety (NYSE:SAFE) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Earnings and Valuation

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This table compares Gladstone Commercial and Safety’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gladstone Commercial $94.80 million 5.31 $5.93 million $1.52 11.66
Safety $23.23 million 13.82 -$1.82 million N/A N/A

Gladstone Commercial has higher revenue and earnings than Safety.

Insider and Institutional Ownership

54.6% of Gladstone Commercial shares are owned by institutional investors. Comparatively, 41.5% of Safety shares are owned by institutional investors. 2.0% of Gladstone Commercial shares are owned by insiders. Comparatively, 1.2% of Safety shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Gladstone Commercial pays an annual dividend of $1.50 per share and has a dividend yield of 8.5%. Safety pays an annual dividend of $0.30 per share and has a dividend yield of 1.7%. Gladstone Commercial pays out 98.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Gladstone Commercial and Safety, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gladstone Commercial 0 3 2 0 2.40
Safety 0 6 1 0 2.14

Gladstone Commercial currently has a consensus target price of $21.33, indicating a potential upside of 20.39%. Safety has a consensus target price of $19.78, indicating a potential upside of 12.07%. Given Gladstone Commercial’s stronger consensus rating and higher possible upside, analysts clearly believe Gladstone Commercial is more favorable than Safety.

Profitability

This table compares Gladstone Commercial and Safety’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gladstone Commercial 6.26% 2.36% 0.68%
Safety N/A N/A N/A

Summary

Gladstone Commercial beats Safety on 11 of the 13 factors compared between the two stocks.

About Gladstone Commercial

Gladstone Commercial Corporation is a real estate investment trust. The Company focuses on acquiring, owning and managing primarily office and industrial properties. The Company also makes long-term industrial and commercial mortgage loans. As of February 15, 2017, the Company owned 95 properties totaling 10.9 million square feet in 24 states. As of December 31, 2016, the Company’s properties were located in various states of the United States, such as Ohio, Pennsylvania, North Carolina, Georgia, South Carolina, Michigan, Minnesota, Colorado and New Jersey. The Company’s properties have tenants from various industries, such as telecommunications; healthcare; automobile; electronics; information technology; chemicals, plastics and rubber; containers, packaging and glass; personal and non-durable consumer products; machinery; banking; childcare; buildings and real estate; beverage, food and tobacco; printing and publishing; education; home and office furnishings, and oil and gas.

About Safety

Safety, Income & Growth Inc. (NYSE:SAFE) is the first publicly traded company that focuses on acquiring, owning, managing and capitalizing ground leases. The Company seeks to provide safe, growing income and capital appreciation to shareholders by building a diversified portfolio of high quality ground leases. The Company, which is taxed as a real estate investment trust (REIT), is managed by its largest shareholder, iStar Inc. Additional information on SAFE is available on its website at www.safetyincomegrowth.com.

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