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

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

Volatility and Risk

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Empire State Realty Trust	$768.27 million	1.06	$47.60 million	$0.07	67.21
Equity Commonwealth	$58.43 million	2.90	$91.16 million	$0.39	4.05

Equity Commonwealth has lower revenue, but higher earnings 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.

Institutional and Insider Ownership

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

Profitability

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

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

Analyst Ratings

This is a breakdown of recent recommendations for Empire State Realty Trust and Equity Commonwealth, as reported by MarketBeat.

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

Empire State Realty Trust currently has a consensus target price of $5.50, indicating a potential upside of 16.90%. Given Empire State Realty Trust’s stronger consensus rating and higher possible upside, equities analysts plainly believe Empire State Realty Trust is more favorable than Equity Commonwealth.

Summary

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

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.

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.