Head to Head Survey: Net Lease Office Properties (NYSE:NLOP) & Empire State Realty Trust (NYSE:ESRT)

Empire State Realty Trust (NYSE:ESRT) and Net Lease Office Properties (NYSE:NLOP) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Empire State Realty Trust	$768.27 million	1.21	$47.60 million	$0.26	20.71
Net Lease Office Properties	$118.92 million	1.37	-$145.26 million	($8.14)	-1.36

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

Institutional & Insider Ownership

67.1% of Empire State Realty Trust shares are owned by institutional investors. Comparatively, 58.3% of Net Lease Office Properties shares are owned by institutional investors. 15.2% of Empire State Realty Trust shares are owned by insiders. Comparatively, 0.7% of Net Lease Office Properties shares are owned 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Empire State Realty Trust	5.09%	2.19%	0.93%
Net Lease Office Properties	-122.31%	-34.26%	-25.39%

Analyst Ratings

This is a summary of recent recommendations for Empire State Realty Trust and Net Lease Office Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Empire State Realty Trust	2	1	0	0	1.33
Net Lease Office Properties	1	0	0	0	1.00

Empire State Realty Trust presently has a consensus target price of $5.92, suggesting a potential upside of 9.87%. Given Empire State Realty Trust’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Empire State Realty Trust is more favorable than Net Lease Office Properties.

Risk and Volatility

Empire State Realty Trust has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, Net Lease Office Properties has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

Summary

Empire State Realty Trust beats Net Lease Office Properties on 12 of the 13 factors compared between the two stocks.

About Empire State Realty Trust

Empire State Realty Trust, Inc. (NYSE: ESRT) is a NYC-focused REIT that owns and operates a portfolio of modernized, amenitized, and well-located office, retail, and multifamily assets. The company is the recognized leader in energy efficiency and indoor environmental quality. ESRT’s flagship Empire State Building – the “World’s Most Famous Building” – includes its Observatory, Tripadvisor’s 2023 Travelers’ Choice Awards: Best of the Best the #1 attraction in the US for two consecutive years. As of September 30, 2023, ESRT’s portfolio is comprised of approximately 8.6 million rentable square feet of office space, 0.7 million rentable square feet of retail space and 727 residential units across three multifamily properties.

About Net Lease Office Properties

Net Lease Office Properties (NYSE: NLOP) is a publicly traded real estate investment trust with a portfolio of 59 high-quality office properties, totaling approximately 8.7 million leasable square feet primarily leased to corporate tenants on a single-tenant net lease basis. The vast majority of the office properties owned by NLOP are located in the U.S., with the balance in Europe. The portfolio consists of 62 corporate tenants operating in a variety of industries, generating annualized based rent (ABR) of approximately $145 million. NLOP's business plan is to focus on realizing value for its shareholders primarily through strategic asset management and disposition of its property portfolio over time. Given WPC's extensive knowledge of the portfolio, NLOP is externally managed and advised by wholly owned affiliates of WPC to successfully execute on its business strategy. Over the course of its 50-year history, WPC has developed significant expertise in the single-tenant office real estate sector, including the operation, leasing, acquisition and development of assets through many market cycles, and has a proven track record of execution.