Douglas Emmett (NYSE: DEI) and Empire State Realty Trust (NYSE:ESRT) are both mid-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitabiliy, dividends, risk and analyst recommendations.

Dividends

Douglas Emmett pays an annual dividend of $0.92 per share and has a dividend yield of 2.4%. Empire State Realty Trust pays an annual dividend of $0.42 per share and has a dividend yield of 2.1%. 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. 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. Empire State Realty Trust has raised its dividend for 6 consecutive years.

Profitability

This table compares Douglas Emmett and Empire State Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Douglas Emmett 11.97% 3.06% 1.18%
Empire State Realty Trust 11.02% 3.88% 1.88%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Douglas Emmett and Empire State Realty Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Douglas Emmett 2 7 0 0 1.78
Empire State Realty Trust 0 3 2 0 2.40

Douglas Emmett presently has a consensus price target of $39.29, indicating a potential upside of 3.22%. Empire State Realty Trust has a consensus price target of $22.20, indicating a potential upside of 8.93%. Given Empire State Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Empire State Realty Trust is more favorable than Douglas Emmett.

Institutional & Insider Ownership

97.2% of Douglas Emmett shares are held by institutional investors. Comparatively, 83.1% of Empire State Realty Trust shares are held by institutional investors. 23.0% of Douglas Emmett shares are held by insiders. Comparatively, 11.8% of Empire State Realty Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Douglas Emmett and Empire State Realty Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Douglas Emmett $776.86 million 7.57 $473.09 million $0.58 65.62
Empire State Realty Trust $672.28 million 4.79 $321.16 million $0.38 53.63

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.

Volatility and Risk

Douglas Emmett has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, Empire State Realty Trust has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Summary

Douglas Emmett beats Empire State Realty Trust on 9 of the 17 factors compared between the two stocks.

About Douglas Emmett

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.

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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