Analyzing Empire State Realty Trust (NYSE:ESRT) & Equity Commonwealth (NYSE:EQC)

Equity Commonwealth (NYSE:EQC) and Empire State Realty Trust (NYSE:ESRT) are both small-cap real estate companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, dividends, profitability, valuation, institutional ownership and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Equity Commonwealth	82.00%	2.09%	1.96%
Empire State Realty Trust	0.93%	0.40%	0.17%

Valuation and Earnings

This table compares Equity Commonwealth and Empire State Realty Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equity Commonwealth	$58.43 million	2.90	$91.16 million	$0.39	4.05
Empire State Realty Trust	$768.27 million	1.73	$47.60 million	$0.07	67.00

Equity Commonwealth has higher earnings, but lower revenue than Empire State Realty Trust. Equity Commonwealth 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.

Analyst Recommendations

This is a summary of current ratings and target prices for Equity Commonwealth and Empire State Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equity Commonwealth	0	0	0	0	0.00
Empire State Realty Trust	2	1	0	0	1.33

Empire State Realty Trust has a consensus target price of $5.50, suggesting a potential upside of 17.27%. Given Empire State Realty Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Empire State Realty Trust is more favorable than Equity Commonwealth.

Insider & Institutional Ownership

96.0% of Equity Commonwealth shares are owned by institutional investors. Comparatively, 67.1% of Empire State Realty Trust shares are owned by institutional investors. 2.1% of Equity Commonwealth shares are owned by insiders. Comparatively, 15.2% of Empire State Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Equity Commonwealth has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, Empire State Realty Trust has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500.

Summary

Equity Commonwealth beats Empire State Realty Trust on 7 of the 13 factors compared between the two stocks.

About Equity Commonwealth

Equity Commonwealth (NYSE: EQC) is a Chicago based, internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States. EQC's portfolio is comprised of four properties totaling 1.5 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.