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

JBG SMITH Properties (NYSE:JBGS) and Empire State Realty Trust (NYSE:ESRT) are both small-cap real estate companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.

Valuation & Earnings

This table compares JBG SMITH 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
JBG SMITH Properties	$498.60 million	1.46	-$139.06 million	($3.54)	-3.50
Empire State Realty Trust	$768.27 million	1.20	$47.60 million	$0.04	133.12

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.

Insider & Institutional Ownership

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

Volatility & Risk

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
JBG SMITH Properties	-29.89%	-13.31%	-3.49%
Empire State Realty Trust	0.30%	0.13%	0.05%

Dividends

JBG SMITH Properties pays an annual dividend of $0.70 per share and has a dividend yield of 5.6%. Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 2.6%. JBG SMITH Properties pays out -19.8% of its earnings in the form of a dividend. 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and price targets for JBG SMITH Properties and Empire State Realty Trust, as reported by MarketBeat.com.

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

JBG SMITH Properties currently has a consensus price target of $12.50, suggesting a potential upside of 0.83%. Empire State Realty Trust has a consensus price target of $5.00, suggesting a potential downside of 6.10%. Given JBG SMITH Properties’ higher probable upside, equities analysts plainly believe JBG SMITH Properties is more favorable than Empire State Realty Trust.

Summary

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

About JBG SMITH Properties

JBG SMITH Properties is a real estate investment trust, which engages in owning, operating, investing in, and developing a portfolio of mixed-use properties. It operates through the following segments: Multifamily, Commercial, and Other. The Multifamily segment refers to the commercial buildings with public areas, retail spaces, and walkable streets. The Commercial segment rents to federal government tenants. The Other segment relates to development assets, corporate entities, land assets for which are the ground lessor and the elimination of inter-segment activity. The company was founded on October 27, 2016, and is headquartered in Bethesda, 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.