Empire State Realty Trust (NYSE:ESRT – Get Free Report) and ARMOUR Residential REIT (NYSE:ARR – Get Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, institutional ownership, earnings and valuation.
Earnings & Valuation
This table compares Empire State Realty Trust and ARMOUR Residential REIT”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Empire State Realty Trust | $767.92 million | 1.80 | $53.24 million | $0.28 | 29.48 |
| ARMOUR Residential REIT | -$478,000.00 | -3,912.42 | -$14.39 million | ($0.43) | -43.29 |
Empire State Realty Trust has higher revenue and earnings than ARMOUR Residential REIT. ARMOUR Residential REIT 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.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Empire State Realty Trust | 1 | 0 | 1 | 0 | 2.00 |
| ARMOUR Residential REIT | 0 | 4 | 0 | 0 | 2.00 |
Empire State Realty Trust presently has a consensus price target of $11.50, indicating a potential upside of 39.34%. ARMOUR Residential REIT has a consensus price target of $20.50, indicating a potential upside of 10.13%. Given Empire State Realty Trust’s higher possible upside, equities analysts clearly believe Empire State Realty Trust is more favorable than ARMOUR Residential REIT.
Profitability
This table compares Empire State Realty Trust and ARMOUR Residential REIT’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Empire State Realty Trust | 6.45% | 2.84% | 1.14% |
| ARMOUR Residential REIT | -2.61% | 16.00% | 1.65% |
Insider and Institutional Ownership
67.1% of Empire State Realty Trust shares are held by institutional investors. Comparatively, 54.2% of ARMOUR Residential REIT shares are held by institutional investors. 14.0% of Empire State Realty Trust shares are held by insiders. Comparatively, 0.4% of ARMOUR Residential REIT shares are held 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.
Risk & Volatility
Empire State Realty Trust has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500. Comparatively, ARMOUR Residential REIT has a beta of 1.53, indicating that its stock price is 53% more volatile than the S&P 500.
Dividends
Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 1.7%. ARMOUR Residential REIT pays an annual dividend of $2.88 per share and has a dividend yield of 15.5%. Empire State Realty Trust pays out 50.0% of its earnings in the form of a dividend. ARMOUR Residential REIT pays out -669.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. ARMOUR Residential REIT is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Empire State Realty Trust beats ARMOUR Residential REIT on 10 of the 15 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 ARMOUR Residential REIT
ARMOUR Residential REIT, Inc. invests in residential mortgage-backed securities (MBS) in the United States. Its securities portfolio primarily consists of the United States Government-sponsored entity's (GSE) and the Government National Mortgage Administration's issued or guaranteed securities backed by fixed rate, hybrid adjustable rate, and adjustable-rate home loans; and unsecured notes and bonds issued by the GSE and the United States treasuries, as well as money market instruments. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. ARMOUR Residential REIT, Inc. was incorporated in 2008 and is based in Vero Beach, Florida.
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