SL Green Realty (NYSE:SLG) and Empire State Realty Trust (NYSE:ESRT) Critical Comparison

Empire State Realty Trust (NYSE:ESRT) and SL Green Realty (NYSE:SLG) are both real estate companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, profitability, dividends, valuation, analyst recommendations and earnings.

Insider & Institutional Ownership

67.1% of Empire State Realty Trust shares are owned by institutional investors. Comparatively, 90.0% of SL Green Realty shares are owned by institutional investors. 15.2% of Empire State Realty Trust shares are owned by company insiders. Comparatively, 5.9% of SL Green Realty shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 3.0%. SL Green Realty pays an annual dividend of $2.47 per share and has a dividend yield of 4.4%. 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. SL Green Realty pays out -90.5% of its earnings in the form of a dividend. SL Green Realty has increased its dividend for 1 consecutive years. SL Green Realty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Empire State Realty Trust and SL Green Realty”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	1.05	$47.60 million	$0.07	66.71
SL Green Realty	$1.00 billion	3.99	-$88.28 million	($2.73)	-20.62

Empire State Realty Trust has higher earnings, but lower revenue than SL Green Realty. SL Green Realty 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 & Volatility

Empire State Realty Trust has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, SL Green Realty has a beta of 1.58, suggesting that its stock price is 58% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Empire State Realty Trust and SL Green Realty, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Empire State Realty Trust	2	1	0	0	1.33
SL Green Realty	2	10	7	0	2.26

Empire State Realty Trust presently has a consensus price target of $5.50, suggesting a potential upside of 17.77%. SL Green Realty has a consensus price target of $55.15, suggesting a potential downside of 2.01%. Given Empire State Realty Trust’s higher possible upside, research analysts plainly believe Empire State Realty Trust is more favorable than SL Green Realty.

Profitability

This table compares Empire State Realty Trust and SL Green Realty’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%
SL Green Realty	-16.92%	-4.37%	-1.53%

Summary

SL Green Realty beats Empire State Realty Trust on 9 of the 17 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 SL Green Realty

3SL Green Realty Corp., Manhattan’s largest office landlord, is a fully integrated real estate investment trust, or REIT, that is focused primarily on acquiring, managing and maximizing value of Manhattan commercial properties. As of June 30, 2022, SL Green held interests in 64 buildings totaling 34.4 million square feet. This included ownership interests in 26.3 million square feet of Manhattan buildings and 7.2 million square feet securing debt and preferred equity investments.