Critical Contrast: Empire State Realty Trust (NYSE:ESRT) & COPT Defense Properties (NYSE:CDP)

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

Volatility & Risk

COPT Defense Properties has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Empire State Realty Trust has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for COPT Defense Properties and Empire State Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
COPT Defense Properties	0	3	5	0	2.62
Empire State Realty Trust	2	1	0	0	1.33

COPT Defense Properties currently has a consensus target price of $36.25, suggesting a potential downside of 1.67%. Empire State Realty Trust has a consensus target price of $5.50, suggesting a potential upside of 16.90%. Given Empire State Realty Trust’s higher possible upside, analysts clearly believe Empire State Realty Trust is more favorable than COPT Defense Properties.

Dividends

COPT Defense Properties pays an annual dividend of $1.28 per share and has a dividend yield of 3.5%. Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 3.0%. COPT Defense Properties pays out 88.9% 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 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. COPT Defense Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares COPT Defense Properties and Empire State Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
COPT Defense Properties	20.94%	10.48%	3.64%
Empire State Realty Trust	0.93%	0.40%	0.17%

Earnings & Valuation

This table compares COPT Defense Properties 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
COPT Defense Properties	$763.92 million	5.47	$152.32 million	$1.44	25.60
Empire State Realty Trust	$782.82 million	1.04	$47.60 million	$0.07	67.21

COPT Defense Properties has higher earnings, but lower revenue than Empire State Realty Trust. COPT Defense 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.

Institutional and Insider Ownership

67.1% of Empire State Realty Trust shares are held by institutional investors. 1.7% of COPT Defense Properties 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, endowments and large money managers believe a stock is poised for long-term growth.

Summary

COPT Defense Properties beats Empire State Realty Trust on 10 of the 16 factors compared between the two stocks.

About COPT Defense Properties

COPT Defense Properties is a real estate investment trust. It acquires, develops, manages, sells, and leases out office properties and data centers. The firm operates through the following segments: Defense/Information Technology Locations, Regional Office, Wholesale Data Center, and Other. The company was founded on January 22,1988 and is headquartered in Columbia, MD.

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.