Reviewing Empire State Realty Trust (NYSE:ESRT) and Retail Opportunity Investments (NASDAQ:ROIC)

Empire State Realty Trust (NYSE:ESRT) and Retail Opportunity Investments (NASDAQ:ROIC) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.

Insider & Institutional Ownership

67.1% of Empire State Realty Trust shares are owned by institutional investors. Comparatively, 97.2% of Retail Opportunity Investments shares are owned by institutional investors. 14.0% of Empire State Realty Trust shares are owned by insiders. Comparatively, 3.0% of Retail Opportunity Investments shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Empire State Realty Trust has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, Retail Opportunity Investments has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500.

Profitability

This table compares Empire State Realty Trust and Retail Opportunity Investments’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Empire State Realty Trust	6.51%	2.85%	1.17%
Retail Opportunity Investments	11.21%	2.75%	1.24%

Valuation & Earnings

This table compares Empire State Realty Trust and Retail Opportunity Investments’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Empire State Realty Trust	$739.57 million	2.31	$53.24 million	$0.30	34.57
Retail Opportunity Investments	$327.73 million	5.06	$34.53 million	$0.30	43.37

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

Dividends

Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 1.4%. Retail Opportunity Investments pays an annual dividend of $0.60 per share and has a dividend yield of 4.6%. Empire State Realty Trust pays out 46.7% of its earnings in the form of a dividend. Retail Opportunity Investments 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.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Empire State Realty Trust and Retail Opportunity Investments, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Empire State Realty Trust	1	2	0	0	1.67
Retail Opportunity Investments	1	1	2	0	2.25

Empire State Realty Trust currently has a consensus price target of $8.33, indicating a potential downside of 19.64%. Retail Opportunity Investments has a consensus price target of $14.38, indicating a potential upside of 10.49%. Given Retail Opportunity Investments’ stronger consensus rating and higher possible upside, analysts clearly believe Retail Opportunity Investments is more favorable than Empire State Realty Trust.

Summary

Retail Opportunity Investments beats Empire State Realty Trust 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 Retail Opportunity Investments

Retail Opportunity Investments Corp. (Nasdaq: ROIC), is a fully integrated, self-managed real estate investment trust (REIT) that specializes in the acquisition, ownership and management of grocery-anchored shopping centers located in densely populated, metropolitan markets across the West Coast. As of December 31, 2023, ROIC owned 94 shopping centers encompassing approximately 10.6 million square feet. ROIC is the largest publicly-traded, grocery-anchored shopping center REIT focused exclusively on the West Coast. ROIC is a member of the S&P SmallCap 600 Index and has investment-grade corporate debt ratings from Moody's Investor Services, S&P Global Ratings and Fitch Ratings, Inc.