Empire State Realty Trust (NYSE: ESRT) and Douglas Emmett (NYSE:DEI) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitabiliy, earnings, dividends and risk.
Valuation & Earnings
This table compares Empire State Realty Trust and Douglas Emmett’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Empire State Realty Trust||$672.28 million||4.74||$321.16 million||$0.38||53.08|
|Douglas Emmett||$776.86 million||7.53||$473.09 million||$0.58||65.23|
Douglas Emmett has higher revenue and earnings than Empire State Realty Trust. Empire State Realty Trust is trading at a lower price-to-earnings ratio than Douglas Emmett, indicating that it is currently the more affordable of the two stocks.
Empire State Realty Trust pays an annual dividend of $0.42 per share and has a dividend yield of 2.1%. Douglas Emmett pays an annual dividend of $0.92 per share and has a dividend yield of 2.4%. Empire State Realty Trust pays out 110.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Douglas Emmett pays out 158.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Douglas Emmett has raised its dividend for 6 consecutive years. Douglas Emmett is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
Empire State Realty Trust has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Douglas Emmett has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.
Insider & Institutional Ownership
83.2% of Empire State Realty Trust shares are owned by institutional investors. Comparatively, 97.2% of Douglas Emmett shares are owned by institutional investors. 11.8% of Empire State Realty Trust shares are owned by insiders. Comparatively, 23.0% of Douglas Emmett shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares Empire State Realty Trust and Douglas Emmett’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Empire State Realty Trust||11.02%||3.88%||1.88%|
This is a summary of current ratings for Empire State Realty Trust and Douglas Emmett, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Empire State Realty Trust||0||3||2||0||2.40|
Empire State Realty Trust currently has a consensus price target of $22.20, suggesting a potential upside of 10.06%. Douglas Emmett has a consensus price target of $39.14, suggesting a potential upside of 3.47%. Given Empire State Realty Trust’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Empire State Realty Trust is more favorable than Douglas Emmett.
Douglas Emmett beats Empire State Realty Trust on 9 of the 17 factors compared between the two stocks.
Empire State Realty Trust Company Profile
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.
Douglas Emmett Company Profile
Douglas Emmett, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is owner and operator of office and multifamily properties located in submarkets in Los Angeles and Honolulu. The Company operates through two segments: the acquisition, development, ownership and management of office real estate (Office Segment), and the acquisition, development, ownership and management of multifamily real estate (Multifamily Segment). The services for its Office segment include primarily rental of office space and other tenant services, including parking and storage space rental. The services for its Multifamily segment include primarily rental of apartments and other tenant services, including parking and storage space rental. It focuses on owning, acquiring developing and managing a substantial share of office properties and multifamily communities in neighborhoods.
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