Head-To-Head Review: Empire State Realty Trust (NYSE:ESRT) vs. EastGroup Properties (NYSE:EGP)

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for EastGroup Properties and Empire State Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EastGroup Properties	0	5	9	1	2.73
Empire State Realty Trust	1	2	1	0	2.00

EastGroup Properties presently has a consensus target price of $195.19, suggesting a potential upside of 7.49%. Empire State Realty Trust has a consensus target price of $8.40, suggesting a potential upside of 26.32%. Given Empire State Realty Trust’s higher possible upside, analysts plainly believe Empire State Realty Trust is more favorable than EastGroup Properties.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
EastGroup Properties	35.58%	7.28%	4.76%
Empire State Realty Trust	4.96%	2.13%	0.91%

Institutional and Insider Ownership

92.1% of EastGroup Properties shares are owned by institutional investors. Comparatively, 67.1% of Empire State Realty Trust shares are owned by institutional investors. 1.0% of EastGroup Properties shares are owned by company insiders. Comparatively, 14.6% of Empire State Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares EastGroup Properties and Empire State Realty Trust”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EastGroup Properties	$640.23 million	15.13	$227.75 million	$4.76	38.15
Empire State Realty Trust	$767.92 million	1.47	$51.64 million	$0.21	31.67

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

Risk & Volatility

EastGroup Properties has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, Empire State Realty Trust has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Dividends

EastGroup Properties pays an annual dividend of $6.20 per share and has a dividend yield of 3.4%. Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 2.1%. EastGroup Properties pays out 130.3% 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 66.7% of its earnings in the form of a dividend. EastGroup Properties has raised its dividend for 4 consecutive years. EastGroup Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

EastGroup Properties beats Empire State Realty Trust on 13 of the 18 factors compared between the two stocks.

About EastGroup Properties

EastGroup Properties, Inc. (NYSE: EGP), a member of the S&P Mid-Cap 400 and Russell 1000 Indexes, is a self-administered equity real estate investment trust focused on the development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis in the states of Florida, Texas, Arizona, California and North Carolina. The Company's goal is to maximize shareholder value by being a leading provider in its markets of functional, flexible and quality business distribution space for location sensitive customers (primarily in the 20,000 to 100,000 square foot range). The Company's strategy for growth is based on ownership of premier distribution facilities generally clustered near major transportation features in supply-constrained submarkets. The Company's portfolio, including development projects and value-add acquisitions in lease-up and under construction, currently includes approximately 59 million square feet.

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.