Analyzing Empire State Realty Trust (NYSE:ESRT) & JBG SMITH Properties (NYSE:JBGS)

Empire State Realty Trust (NYSE:ESRT) and JBG SMITH Properties (NYSE:JBGS) 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, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Institutional & Insider Ownership

67.1% of Empire State Realty Trust shares are owned by institutional investors. Comparatively, 98.5% of JBG SMITH Properties shares are owned by institutional investors. 15.2% of Empire State Realty Trust shares are owned by insiders. Comparatively, 11.9% of JBG SMITH Properties shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Empire State Realty Trust and JBG SMITH Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Empire State Realty Trust	0.30%	0.13%	0.05%
JBG SMITH Properties	-39.73%	-18.71%	-4.78%

Risk and Volatility

Empire State Realty Trust has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500. Comparatively, JBG SMITH Properties has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500.

Earnings & Valuation

This table compares Empire State Realty Trust and JBG SMITH Properties”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Empire State Realty Trust	$768.27 million	1.18	$47.60 million	$0.04	130.88
JBG SMITH Properties	$498.60 million	1.39	-$139.06 million	($3.54)	-3.39

Empire State Realty Trust has higher revenue and earnings than JBG SMITH Properties. JBG SMITH Properties 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 Ratings

This is a summary of current recommendations for Empire State Realty Trust and JBG SMITH Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Empire State Realty Trust	2	1	0	0	1.33
JBG SMITH Properties	3	0	0	0	1.00

Empire State Realty Trust currently has a consensus target price of $5.00, indicating a potential downside of 4.49%. JBG SMITH Properties has a consensus target price of $12.50, indicating a potential upside of 4.04%. Given JBG SMITH Properties’ higher possible upside, analysts plainly believe JBG SMITH Properties is more favorable than Empire State Realty Trust.

Dividends

Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 2.7%. JBG SMITH Properties pays an annual dividend of $0.70 per share and has a dividend yield of 5.8%. Empire State Realty Trust pays out 350.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. JBG SMITH Properties pays out -19.8% of its earnings in the form of a dividend. JBG SMITH Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Empire State Realty Trust beats JBG SMITH Properties on 10 of the 15 factors compared between the two stocks.

About Empire State Realty Trust

Empire State Realty Trust, Inc. is a real estate investment trust that owns, manages and leases office and retail properties, primarily in Manhattan and the broader New York metropolitan area. Its portfolio includes the Empire State Building and other commercial properties. The company’s business includes leasing office and retail space to tenants, as well as operating the Empire State Building Observatory, a visitor attraction offering views of New York City. Empire State Realty Trust became a publicly traded company in 2013.

About JBG SMITH Properties

JBG SMITH Properties is a real estate investment trust that owns, operates and develops residential, office and retail properties. Its portfolio is concentrated in the Washington, D.C., metropolitan area, with a significant presence in National Landing, Virginia, as well as properties in the District and suburban Maryland. The company focuses on urban, mixed-use and transit-oriented communities, serving residents, businesses and retail tenants. Its activities include leasing and managing existing properties and developing projects intended to bring housing, workplaces and services together.