Analyzing Empire State Realty Trust (NYSE:ESRT) & SL Green Realty (NYSE:SLG)

SL Green Realty (NYSE:SLG) and Empire State Realty Trust (NYSE:ESRT) are both real estate companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Dividends

SL Green Realty pays an annual dividend of $2.47 per share and has a dividend yield of 4.3%. Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 2.9%. SL Green Realty pays out -90.5% of its earnings in the form of a dividend. 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. SL Green Realty has increased its dividend for 1 consecutive years. SL Green Realty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares SL Green Realty and Empire State Realty Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SL Green Realty	$983.27 million	4.19	-$88.28 million	($2.73)	-21.12
Empire State Realty Trust	$768.27 million	1.78	$47.60 million	$0.07	69.07

Empire State Realty Trust has lower revenue, but higher earnings than SL Green Realty. SL Green Realty 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 & Institutional Ownership

90.0% of SL Green Realty shares are held by institutional investors. Comparatively, 67.1% of Empire State Realty Trust shares are held by institutional investors. 5.9% of SL Green Realty shares are held by company insiders. Comparatively, 15.2% of Empire State Realty Trust 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.

Analyst Recommendations

This is a breakdown of current ratings for SL Green Realty and Empire State Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SL Green Realty	2	10	7	0	2.26
Empire State Realty Trust	2	1	0	0	1.33

SL Green Realty presently has a consensus target price of $55.15, indicating a potential downside of 4.36%. Empire State Realty Trust has a consensus target price of $5.50, indicating a potential upside of 13.75%. Given Empire State Realty Trust’s higher probable upside, analysts plainly believe Empire State Realty Trust is more favorable than SL Green Realty.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SL Green Realty	-16.92%	-4.37%	-1.53%
Empire State Realty Trust	0.93%	0.40%	0.17%

Volatility and Risk

SL Green Realty has a beta of 1.58, indicating that its stock price is 58% more volatile than the S&P 500. Comparatively, Empire State Realty Trust has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500.

Summary

SL Green Realty beats Empire State Realty Trust on 9 of the 17 factors compared between the two stocks.

About SL Green Realty

3SL Green Realty Corp., Manhattan’s largest office landlord, is a fully integrated real estate investment trust, or REIT, that is focused primarily on acquiring, managing and maximizing value of Manhattan commercial properties. As of June 30, 2022, SL Green held interests in 64 buildings totaling 34.4 million square feet. This included ownership interests in 26.3 million square feet of Manhattan buildings and 7.2 million square feet securing debt and preferred equity investments.

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.