Analyzing Empire State Realty Trust (NYSE:ESRT) and Orion Office REIT (NYSE:ONL)

Orion Office REIT (NYSE:ONL) 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 earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Insider & Institutional Ownership

79.9% of Orion Office REIT shares are held by institutional investors. Comparatively, 67.1% of Empire State Realty Trust shares are held by institutional investors. 1.6% of Orion Office REIT shares are held by insiders. Comparatively, 15.2% of Empire State Realty Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Orion Office REIT 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Orion Office REIT	-65.66%	-14.85%	-7.95%
Empire State Realty Trust	0.93%	0.40%	0.17%

Valuation & Earnings

This table compares Orion Office REIT and Empire State Realty Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orion Office REIT	$147.65 million	0.96	-$139.31 million	($1.69)	-1.48
Empire State Realty Trust	$768.27 million	0.91	$47.60 million	$0.07	57.64

Empire State Realty Trust has higher revenue and earnings than Orion Office REIT. Orion Office REIT 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 for Orion Office REIT and Empire State Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orion Office REIT	1	0	1	0	2.00
Empire State Realty Trust	2	1	0	0	1.33

Orion Office REIT presently has a consensus target price of $3.50, suggesting a potential upside of 40.28%. Empire State Realty Trust has a consensus target price of $5.00, suggesting a potential upside of 23.92%. Given Orion Office REIT’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Orion Office REIT is more favorable than Empire State Realty Trust.

Dividends

Orion Office REIT pays an annual dividend of $0.08 per share and has a dividend yield of 3.2%. Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 3.5%. Orion Office REIT pays out -4.7% 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.

Summary

Empire State Realty Trust beats Orion Office REIT on 9 of the 16 factors compared between the two stocks.

About Orion Office REIT

Orion Office REIT specializes in the ownership, acquisition and management of a diversified portfolio of mission-critical and corporate headquarters office buildings in high-quality suburban markets across the U.S. The portfolio is leased primarily on a single-tenant net lease basis to creditworthy tenants. The company's team of experienced industry leaders employs a proven, cycle-tested investment evaluation framework which serves as the lens through which capital allocation decisions are made for the current portfolio and future acquisitions.

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.