Analyzing COPT Defense Properties (NYSE:CDP) & Empire State Realty Trust (NYSE:ESRT)

Empire State Realty Trust (NYSE:ESRT) and COPT Defense Properties (NYSE:CDP) are both real estate companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Insider & Institutional Ownership

67.1% of Empire State Realty Trust shares are held by institutional investors. 15.2% of Empire State Realty Trust shares are held by company insiders. Comparatively, 1.7% of COPT Defense Properties shares are held by company 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.

Dividends

Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 2.8%. COPT Defense Properties pays an annual dividend of $1.28 per share and has a dividend yield of 3.7%. Empire State Realty Trust pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. COPT Defense Properties pays out 88.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. COPT Defense Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Empire State Realty Trust and COPT Defense Properties”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	$768.27 million	1.13	$47.60 million	$0.07	71.93
COPT Defense Properties	$763.92 million	5.07	$152.32 million	$1.44	23.73

COPT Defense Properties has lower revenue, but higher earnings than Empire State Realty Trust. COPT Defense 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.

Risk & Volatility

Empire State Realty Trust has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, COPT Defense Properties has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Empire State Realty Trust and COPT Defense Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Empire State Realty Trust	2	1	0	0	1.33
COPT Defense Properties	0	3	5	0	2.62

Empire State Realty Trust currently has a consensus target price of $5.00, suggesting a potential downside of 0.70%. COPT Defense Properties has a consensus target price of $38.00, suggesting a potential upside of 11.19%. Given COPT Defense Properties’ stronger consensus rating and higher probable upside, analysts clearly believe COPT Defense Properties is more favorable than Empire State Realty Trust.

Profitability

This table compares Empire State Realty Trust and COPT Defense Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Empire State Realty Trust	0.93%	0.40%	0.17%
COPT Defense Properties	20.94%	10.48%	3.64%

Summary

COPT Defense Properties beats Empire State Realty Trust on 11 of the 16 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 COPT Defense Properties

COPT Defense Properties is a real estate investment trust. It acquires, develops, manages, sells, and leases out office properties and data centers. The firm operates through the following segments: Defense/Information Technology Locations, Regional Office, Wholesale Data Center, and Other. The company was founded on January 22,1988 and is headquartered in Columbia, MD.