Contrasting Empire State Realty Trust (NYSE:ESRT) and Postal Realty Trust (NYSE:PSTL)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Postal Realty Trust	14.77%	4.20%	1.99%
Empire State Realty Trust	6.06%	2.60%	1.14%

Dividends

Postal Realty Trust pays an annual dividend of $0.98 per share and has a dividend yield of 4.7%. Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 2.4%. Postal Realty Trust pays out 213.0% 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 pays out 53.8% of its earnings in the form of a dividend. Postal Realty Trust has raised its dividend for 3 consecutive years. Postal Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Postal Realty Trust and Empire State Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Postal Realty Trust	0	1	4	0	2.80
Empire State Realty Trust	1	2	1	0	2.00

Postal Realty Trust currently has a consensus price target of $19.69, indicating a potential downside of 5.13%. Empire State Realty Trust has a consensus price target of $7.70, indicating a potential upside of 30.40%. Given Empire State Realty Trust’s higher possible upside, analysts clearly believe Empire State Realty Trust is more favorable than Postal Realty Trust.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Postal Realty Trust	$95.82 million	5.64	$6.60 million	$0.46	45.11
Empire State Realty Trust	$768.27 million	1.31	$47.60 million	$0.26	22.71

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

Institutional and Insider Ownership

57.9% of Postal Realty Trust shares are held by institutional investors. Comparatively, 67.1% of Empire State Realty Trust shares are held by institutional investors. 13.7% of Postal Realty Trust shares are held by company insiders. Comparatively, 14.6% of Empire State Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Postal Realty Trust has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, Empire State Realty Trust has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500.

Summary

Postal Realty Trust beats Empire State Realty Trust on 10 of the 17 factors compared between the two stocks.

About Postal Realty Trust

Postal Realty Trust, Inc. (NYSE: PSTL) is an internally managed real estate investment trust that owns properties primarily leased to the United States Postal Service ("USPS"). PSTL is focused on acquiring the network of USPS properties, which provide a critical element of the nation's logistics infrastructure that facilitates cost effective and efficient last-mile delivery solutions. As of December 31, 2023, PSTL owned 1,509 properties (including two properties accounted for as financing leases) located in 49 states and one territory comprising approximately 5.9 million net leasable interior square feet. Subsequent to quarter-end and through February 23, 2024, PSTL closed on eight additional properties comprising approximately 33,000 net leasable interior 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.