Head-To-Head Analysis: Braemar Hotels & Resorts (NYSE:BHR) & Empire State Realty Trust (NYSE:ESRT)

Braemar Hotels & Resorts (NYSE:BHR) and Empire State Realty Trust (NYSE:ESRT) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.

Volatility & Risk

Braemar Hotels & Resorts has a beta of 2.05, meaning that its share price is 105% more volatile than the S&P 500. Comparatively, Empire State Realty Trust has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.

Profitability

This table compares Braemar Hotels & Resorts and Empire State Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Braemar Hotels & Resorts	-0.30%	-0.78%	-0.10%
Empire State Realty Trust	6.45%	2.84%	1.14%

Institutional and Insider Ownership

64.8% of Braemar Hotels & Resorts shares are held by institutional investors. Comparatively, 67.1% of Empire State Realty Trust shares are held by institutional investors. 1.8% of Braemar Hotels & Resorts shares are held by insiders. Comparatively, 14.0% of Empire State Realty Trust 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.

Dividends

Braemar Hotels & Resorts pays an annual dividend of $0.20 per share and has a dividend yield of 7.7%. Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 1.6%. Braemar Hotels & Resorts pays out -26.0% of its earnings in the form of a dividend. Empire State Realty Trust pays out 50.0% 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. Braemar Hotels & Resorts is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Braemar Hotels & Resorts 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
Braemar Hotels & Resorts	$739.34 million	0.23	-$27.02 million	($0.77)	-3.36
Empire State Realty Trust	$767.92 million	1.88	$53.24 million	$0.28	30.98

Empire State Realty Trust has higher revenue and earnings than Braemar Hotels & Resorts. Braemar Hotels & Resorts 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

This is a summary of current ratings and target prices for Braemar Hotels & Resorts and Empire State Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Braemar Hotels & Resorts	0	1	0	0	2.00
Empire State Realty Trust	1	0	1	0	2.00

Braemar Hotels & Resorts presently has a consensus price target of $2.50, suggesting a potential downside of 3.44%. Empire State Realty Trust has a consensus price target of $11.50, suggesting a potential upside of 32.56%. Given Empire State Realty Trust’s higher possible upside, analysts plainly believe Empire State Realty Trust is more favorable than Braemar Hotels & Resorts.

Summary

Empire State Realty Trust beats Braemar Hotels & Resorts on 12 of the 15 factors compared between the two stocks.

About Braemar Hotels & Resorts

Braemar Hotels & Resorts is a conservatively capitalized REIT that invests primarily in high RevPAR, full-service luxury hotels and resorts. We are listed on the New York Stock Exchange under the symbol BHR and are externally-advised by Ashford (NYSE American: AINC).

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.