Empire State Realty Trust (ESRT) vs. Its Competitors Critical Review

Empire State Realty Trust (NYSE: ESRT) is one of 90 publicly-traded companies in the “Commercial REITs” industry, but how does it compare to its competitors? We will compare Empire State Realty Trust to similar companies based on the strength of its dividends, institutional ownership, valuation, profitability, risk, analyst recommendations and earnings.

Insider & Institutional Ownership

83.7% of Empire State Realty Trust shares are owned by institutional investors. Comparatively, 69.5% of shares of all “Commercial REITs” companies are owned by institutional investors. 11.8% of Empire State Realty Trust shares are owned by insiders. Comparatively, 9.0% of shares of all “Commercial REITs” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Empire State Realty Trust and its competitors revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Empire State Realty Trust $678.00 million $52.39 million 51.33
Empire State Realty Trust Competitors $544.77 million $101.33 million 426.79

Empire State Realty Trust has higher revenue, but lower earnings than its competitors. Empire State Realty Trust is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Volatility & Risk

Empire State Realty Trust has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Empire State Realty Trust’s competitors have a beta of 0.79, suggesting that their average stock price is 21% less volatile than the S&P 500.

Dividends

Empire State Realty Trust pays an annual dividend of $0.42 per share and has a dividend yield of 2.1%. Empire State Realty Trust pays out 107.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Commercial REITs” companies pay a dividend yield of 3.9% and pay out 162.0% of their earnings in the form of a dividend.

Profitability

This table compares Empire State Realty Trust and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Empire State Realty Trust 11.90% 3.98% 2.04%
Empire State Realty Trust Competitors 53.27% 6.71% 3.86%

Analyst Recommendations

This is a summary of recent recommendations for Empire State Realty Trust and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Empire State Realty Trust 0 3 1 0 2.25
Empire State Realty Trust Competitors 646 2552 2209 24 2.30

Empire State Realty Trust presently has a consensus target price of $21.75, indicating a potential upside of 8.64%. As a group, “Commercial REITs” companies have a potential upside of 7.13%. Given Empire State Realty Trust’s higher possible upside, equities research analysts clearly believe Empire State Realty Trust is more favorable than its competitors.

Summary

Empire State Realty Trust competitors beat Empire State Realty Trust on 9 of the 15 factors compared.

About Empire State Realty Trust

Empire State Realty Trust, Inc. is a real estate investment trust. The Company owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building. The Company operates through two segments: Real Estate and Observatory. The Real Estate segment includes all activities related to the ownership, management, operation, acquisition, repositioning and disposition of its real estate assets. The Observatory segment operates the 86th and 102nd floor observatories at the Empire State Building. As of December 31, 2016, its portfolio consisted of 14 office properties and six standalone retail properties totaling approximately 10.1 million rentable square feet. The Company’s properties include One Grand Central Place, 1400 Broadway, 111 West 33rd Street, 250 West 57th Street, 1359 Broadway and 1333 Broadway.

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