Empire State Realty Trust (ESRT) and Kilroy Realty (KRC) Head to Head Comparison

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

Insider and Institutional Ownership

82.6% of Empire State Realty Trust shares are held by institutional investors. Comparatively, 97.6% of Kilroy Realty shares are held by institutional investors. 11.8% of Empire State Realty Trust shares are held by insiders. Comparatively, 2.3% of Kilroy Realty shares are held 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.

Valuation & Earnings

This table compares Empire State Realty Trust and Kilroy Realty’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Empire State Realty Trust $678.00 million 4.55 $52.39 million $0.39 49.85
Kilroy Realty $642.57 million 10.95 $293.78 million $1.52 47.06

Kilroy Realty has lower revenue, but higher earnings than Empire State Realty Trust. Kilroy Realty 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.

Volatility & Risk

Empire State Realty Trust has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Kilroy Realty has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Profitability

This table compares Empire State Realty Trust and Kilroy Realty’s 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%
Kilroy Realty 23.77% 4.44% 2.45%

Dividends

Empire State Realty Trust pays an annual dividend of $0.42 per share and has a dividend yield of 2.2%. Kilroy Realty pays an annual dividend of $1.70 per share and has a dividend yield of 2.4%. 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. Kilroy Realty pays out 111.8% 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 2 consecutive years and Kilroy Realty has raised its dividend for 2 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for Empire State Realty Trust and Kilroy Realty, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Empire State Realty Trust 0 1 1 0 2.50
Kilroy Realty 0 6 3 0 2.33

Empire State Realty Trust presently has a consensus price target of $22.33, indicating a potential upside of 14.88%. Kilroy Realty has a consensus price target of $76.86, indicating a potential upside of 7.45%. Given Empire State Realty Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Empire State Realty Trust is more favorable than Kilroy Realty.

Summary

Kilroy Realty beats Empire State Realty Trust on 9 of the 16 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.

Kilroy Realty Company Profile

Kilroy Realty Corporation is a real estate investment trust (REIT). The Company operates through the office properties segment. It operates in office and mixed-use submarkets along the West Coast. It owns, develops, acquires and manages real estate assets, consisting primarily of Class A properties in the coastal regions of Los Angeles, Orange County, San Diego County, the San Francisco Bay Area and Greater Seattle. It owns its interests in all of its real estate assets through Kilroy Realty, L.P. (Operating Partnership) and the Kilroy Realty Finance Partnership, L.P. (Finance Partnership). Its stabilized portfolio includes all of its properties with the exception of development and redevelopment properties under construction or committed for construction, lease-up properties, real estate assets held for sale and undeveloped land. As of December 31, 2016, its stabilized portfolio of operating properties included 108 stabilized office properties and a stabilized residential property.

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