Empire State Realty Trust (NYSE: ESRT) and Armada Hoffler Properties (NYSE:AHH) are both financials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.

Analyst Ratings

This is a summary of current ratings and price targets for Empire State Realty Trust and Armada Hoffler Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Empire State Realty Trust 0 1 1 0 2.50
Armada Hoffler Properties 0 2 4 0 2.67

Empire State Realty Trust currently has a consensus target price of $22.33, indicating a potential upside of 9.75%. Armada Hoffler Properties has a consensus target price of $14.70, indicating a potential downside of 4.73%. Given Empire State Realty Trust’s higher probable upside, equities analysts plainly believe Empire State Realty Trust is more favorable than Armada Hoffler Properties.

Volatility and Risk

Empire State Realty Trust has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, Armada Hoffler Properties has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500.

Insider & Institutional Ownership

82.5% of Empire State Realty Trust shares are held by institutional investors. Comparatively, 82.1% of Armada Hoffler Properties shares are held by institutional investors. 11.8% of Empire State Realty Trust shares are held by insiders. Comparatively, 16.6% of Armada Hoffler Properties shares are held 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.

Dividends

Empire State Realty Trust pays an annual dividend of $0.42 per share and has a dividend yield of 2.1%. Armada Hoffler Properties pays an annual dividend of $0.76 per share and has a dividend yield of 4.9%. Empire State Realty Trust pays out 105.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Armada Hoffler Properties pays out 152.0% 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 increased its dividend for 3 consecutive years.

Profitability

This table compares Empire State Realty Trust and Armada Hoffler Properties’ 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%
Armada Hoffler Properties 7.78% 6.36% 2.47%

Earnings & Valuation

This table compares Empire State Realty Trust and Armada Hoffler Properties’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Empire State Realty Trust $678.00 million 4.76 $52.39 million $0.40 50.88
Armada Hoffler Properties $258.39 million 2.68 $28.07 million $0.50 30.86

Empire State Realty Trust has higher revenue and earnings than Armada Hoffler Properties. Armada Hoffler Properties is trading at a lower price-to-earnings ratio than Empire State Realty Trust, indicating that it is currently the more affordable of the two stocks.

Summary

Empire State Realty Trust beats Armada Hoffler Properties on 10 of the 17 factors compared between the two stocks.

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.

About Armada Hoffler Properties

Armada Hoffler Properties, Inc. is a real estate company. The Company is engaged in developing, building, owning and managing institutional-grade office, retail and multifamily properties in various markets throughout the Mid-Atlantic and Southeastern United States. In addition to the ownership of its operating property portfolio, the Company develops and builds properties for its own account and through joint ventures between the Company and unaffiliated partners. It also provides general contracting services to third parties. Its construction and development experience includes mid- and high-rise office buildings, retail strip malls and retail power centers, multifamily apartment communities, hotels and conference centers, single- and multi-tenant industrial, distribution and manufacturing facilities, educational, medical and special purpose facilities, government projects, parking garages and mixed-use town centers.

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