Kilroy Realty (NYSE:KRC) and Empire State Realty Trust (NYSE:ESRT) Financial Analysis

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

Volatility and Risk

Empire State Realty Trust has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, Kilroy Realty has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Empire State Realty Trust and Kilroy Realty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Empire State Realty Trust	2	1	0	0	1.33
Kilroy Realty	2	9	4	0	2.13

Empire State Realty Trust currently has a consensus target price of $5.00, suggesting a potential downside of 4.69%. Kilroy Realty has a consensus target price of $38.54, suggesting a potential upside of 8.29%. Given Kilroy Realty’s stronger consensus rating and higher possible upside, analysts clearly believe Kilroy Realty 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%. Kilroy Realty pays an annual dividend of $2.16 per share and has a dividend yield of 6.1%. 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. Kilroy Realty pays out 900.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Empire State Realty Trust and Kilroy Realty’s 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%
Kilroy Realty	2.63%	0.52%	0.27%

Institutional and Insider Ownership

67.1% of Empire State Realty Trust shares are held by institutional investors. Comparatively, 94.2% of Kilroy Realty shares are held by institutional investors. 15.2% of Empire State Realty Trust shares are held by company insiders. Comparatively, 0.8% of Kilroy Realty shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Empire State Realty Trust and Kilroy 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	1.18	$47.60 million	$0.04	131.15
Kilroy Realty	$1.11 billion	3.72	$276.12 million	$0.24	148.28

Kilroy Realty has higher revenue and earnings than Empire State Realty Trust. Empire State Realty Trust is trading at a lower price-to-earnings ratio than Kilroy Realty, indicating that it is currently the more affordable of the two stocks.

Summary

Kilroy Realty beats Empire State Realty Trust on 13 of the 16 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 Kilroy Realty

Kilroy Realty Corporation is a real estate investment trust that owns, develops and operates office and life science properties. Its portfolio includes workplaces and research facilities designed to serve businesses in technology, media, entertainment and the life sciences. The company focuses on major coastal markets, including the San Francisco Bay Area, Los Angeles, San Diego and Seattle, as well as Austin, Texas. Its properties include office buildings, laboratory space and mixed-use developments.