Comparing Global Net Lease (GNL) & Empire State Realty Trust (ESRT)

Global Net Lease (NYSE: GNL) and Empire State Realty Trust (NYSE:ESRT) are both financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Profitability

This table compares Global Net Lease and Empire State Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Global Net Lease 12.65% 2.29% 1.06%
Empire State Realty Trust 11.90% 3.98% 2.04%

Dividends

Global Net Lease pays an annual dividend of $2.13 per share and has a dividend yield of 13.0%. Empire State Realty Trust pays an annual dividend of $0.42 per share and has a dividend yield of 2.3%. Global Net Lease pays out 434.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. Empire State Realty Trust has increased its dividend for 2 consecutive years.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Global Net Lease and Empire State Realty Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Global Net Lease 0 2 0 0 2.00
Empire State Realty Trust 0 1 1 0 2.50

Global Net Lease currently has a consensus target price of $26.00, indicating a potential upside of 58.54%. Empire State Realty Trust has a consensus target price of $22.33, indicating a potential upside of 23.12%. Given Global Net Lease’s higher probable upside, research analysts plainly believe Global Net Lease is more favorable than Empire State Realty Trust.

Valuation & Earnings

This table compares Global Net Lease and Empire State Realty Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Global Net Lease $214.17 million 5.15 $47.14 million $0.49 33.47
Empire State Realty Trust $678.00 million 4.24 $52.39 million $0.40 45.35

Empire State Realty Trust has higher revenue and earnings than Global Net Lease. Global Net Lease 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.

Insider and Institutional Ownership

44.6% of Global Net Lease shares are held by institutional investors. Comparatively, 82.6% of Empire State Realty Trust shares are held by institutional investors. 0.2% of Global Net Lease 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, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Empire State Realty Trust beats Global Net Lease on 11 of the 16 factors compared between the two stocks.

Global Net Lease Company Profile

Global Net Lease, Inc. is a real estate investment trust. The Company’s business consists of owning, managing, operating, leasing, acquiring, investing in and disposing of real estate assets. It owns and invests in commercial properties principally in the United States, the United Kingdom and continental Europe that are then leased to companies. It was formed to primarily acquire a portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant net-leased commercial properties. As of December 31, 2016, it owned 310 properties consisting of 22 million rentable square feet. As of December 31, 2016, its owned 310 properties, including 241 properties located in the United States and Puerto Rico, 43 properties located in the United Kingdom and 26 properties located across continental Europe. It may also originate or acquire first mortgage loans secured by real estate. Its business is conducted through Global Net Lease Operating Partnership, L.P.

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.

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