Critical Survey: Armada Hoffler Properties (AHH) & Empire State Realty Trust (ESRT)
Armada Hoffler Properties (NYSE: AHH) and Empire State Realty Trust (NYSE:ESRT) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.
This is a summary of recent recommendations for Armada Hoffler Properties and Empire State Realty Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Armada Hoffler Properties||0||2||4||0||2.67|
|Empire State Realty Trust||0||1||1||0||2.50|
Armada Hoffler Properties presently has a consensus price target of $14.70, indicating a potential downside of 5.77%. Empire State Realty Trust has a consensus price target of $22.33, indicating a potential upside of 9.58%. Given Empire State Realty Trust’s higher probable upside, analysts clearly believe Empire State Realty Trust is more favorable than Armada Hoffler Properties.
Institutional and Insider Ownership
82.1% of Armada Hoffler Properties shares are owned by institutional investors. Comparatively, 82.5% of Empire State Realty Trust shares are owned by institutional investors. 16.6% of Armada Hoffler Properties shares are owned by insiders. Comparatively, 11.8% of Empire State Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Armada Hoffler Properties 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|
|Armada Hoffler Properties||$258.39 million||2.71||$28.07 million||$0.50||31.20|
|Empire State Realty Trust||$678.00 million||4.77||$52.39 million||$0.39||52.26|
Empire State Realty Trust has higher revenue and earnings than Armada Hoffler Properties. Armada Hoffler 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.
Risk and Volatility
Armada Hoffler Properties has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500. Comparatively, Empire State Realty Trust has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.
Armada Hoffler Properties pays an annual dividend of $0.76 per share and has a dividend yield of 4.9%. Empire State Realty Trust pays an annual dividend of $0.42 per share and has a dividend yield of 2.1%. Armada Hoffler Properties pays out 152.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Empire State Realty Trust pays out 107.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Armada Hoffler Properties has increased its dividend for 3 consecutive years. Armada Hoffler Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Armada Hoffler Properties and Empire State Realty Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Armada Hoffler Properties||7.78%||6.36%||2.47%|
|Empire State Realty Trust||11.90%||3.98%||2.04%|
Empire State Realty Trust beats Armada Hoffler Properties on 9 of the 17 factors compared between the two stocks.
Armada Hoffler Properties Company Profile
Armada Hoffler Properties, Inc. is a real estate company. The Company is engaged in developing, building, owning and managing institutional-grade office, retail and multifamily properties in various markets throughout the Mid-Atlantic and Southeastern United States. In addition to the ownership of its operating property portfolio, the Company develops and builds properties for its own account and through joint ventures between the Company and unaffiliated partners. It also provides general contracting services to third parties. Its construction and development experience includes mid- and high-rise office buildings, retail strip malls and retail power centers, multifamily apartment communities, hotels and conference centers, single- and multi-tenant industrial, distribution and manufacturing facilities, educational, medical and special purpose facilities, government projects, parking garages and mixed-use town centers.
Empire State Realty Trust Company Profile
Empire State Realty Trust, Inc. is a real estate investment trust. The Company owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building. The Company operates through two segments: Real Estate and Observatory. The Real Estate segment includes all activities related to the ownership, management, operation, acquisition, repositioning and disposition of its real estate assets. The Observatory segment operates the 86th and 102nd floor observatories at the Empire State Building. As of December 31, 2016, its portfolio consisted of 14 office properties and six standalone retail properties totaling approximately 10.1 million rentable square feet. The Company’s properties include One Grand Central Place, 1400 Broadway, 111 West 33rd Street, 250 West 57th Street, 1359 Broadway and 1333 Broadway.
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