Head-To-Head Review: Saul Centers (NYSE:BFS) versus Realty Income (NYSE:O)

Realty Income (NYSE:O) and Saul Centers (NYSE:BFS) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitability.

Insider and Institutional Ownership

70.8% of Realty Income shares are held by institutional investors. Comparatively, 50.0% of Saul Centers shares are held by institutional investors. 0.1% of Realty Income shares are held by insiders. Comparatively, 56.6% of Saul Centers shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings for Realty Income and Saul Centers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Realty Income	0	9	6	0	2.40
Saul Centers	0	0	1	0	3.00

Realty Income currently has a consensus target price of $61.57, indicating a potential upside of 2.57%. Saul Centers has a consensus target price of $43.50, indicating a potential upside of 11.71%. Given Saul Centers’ stronger consensus rating and higher probable upside, analysts plainly believe Saul Centers is more favorable than Realty Income.

Earnings & Valuation

This table compares Realty Income and Saul Centers’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Realty Income	$4.72 billion	11.09	$872.31 million	$1.08	55.58
Saul Centers	$264.08 million	3.54	$52.69 million	$1.73	22.51

Realty Income has higher revenue and earnings than Saul Centers. Saul Centers is trading at a lower price-to-earnings ratio than Realty Income, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Realty Income has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, Saul Centers has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Profitability

This table compares Realty Income and Saul Centers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Realty Income	17.74%	3.26%	1.32%
Saul Centers	20.49%	16.65%	2.71%

Dividends

Realty Income pays an annual dividend of $3.15 per share and has a dividend yield of 5.2%. Saul Centers pays an annual dividend of $2.36 per share and has a dividend yield of 6.1%. Realty Income pays out 291.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Saul Centers pays out 136.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Realty Income has raised its dividend for 32 consecutive years. Saul Centers is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Saul Centers beats Realty Income on 10 of the 17 factors compared between the two stocks.

About Realty Income

Realty Income, The Monthly Dividend Company, is an S&P 500 company and member of the S&P 500 Dividend Aristocrats index. We invest in people and places to deliver dependable monthly dividends that increase over time. The company is structured as a real estate investment trust ("REIT"), and its monthly dividends are supported by the cash flow from over 15,450 real estate properties (including properties acquired in the Spirit merger in January 2024) primarily owned under long-term net lease agreements with commercial clients. To date, the company has declared 644 consecutive monthly dividends on its shares of common stock throughout its 55-year operating history and increased the dividend 123 times since Realty Income's public listing in 1994 (NYSE: O).

About Saul Centers

Saul Centers is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a real estate portfolio comprised of 61 properties that includes (a) 57 community and neighborhood Shopping Centers and Mixed-Use properties with approximately 9.8 million square feet of leasable area and (b) four land and development properties. Over 85% of the Company’s property operating income is generated from properties in the metropolitan Washington, DC/Baltimore area.