Reviewing Empire State Realty Trust (NYSE:ESRT) and Sotherly Hotels (NASDAQ:SOHO)

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

Institutional & Insider Ownership

67.1% of Empire State Realty Trust shares are held by institutional investors. Comparatively, 27.5% of Sotherly Hotels shares are held by institutional investors. 14.6% of Empire State Realty Trust shares are held by insiders. Comparatively, 14.6% of Sotherly Hotels shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Empire State Realty Trust and Sotherly Hotels, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Empire State Realty Trust	1	1	2	0	2.25
Sotherly Hotels	0	1	0	0	2.00

Empire State Realty Trust currently has a consensus price target of $10.4333, suggesting a potential upside of 44.79%. Sotherly Hotels has a consensus price target of $1.50, suggesting a potential upside of 89.87%. Given Sotherly Hotels’ higher possible upside, analysts clearly believe Sotherly Hotels is more favorable than Empire State Realty Trust.

Risk & Volatility

Empire State Realty Trust has a beta of 1.7, suggesting that its stock price is 70% more volatile than the S&P 500. Comparatively, Sotherly Hotels has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Profitability

This table compares Empire State Realty Trust and Sotherly Hotels’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Empire State Realty Trust	5.67%	2.45%	1.02%
Sotherly Hotels	2.53%	10.29%	1.13%

Valuation & Earnings

This table compares Empire State Realty Trust and Sotherly Hotels”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Empire State Realty Trust	$767.92 million	1.58	$51.64 million	$0.24	30.03
Sotherly Hotels	$181.89 million	0.09	$1.30 million	($0.19)	-4.16

Empire State Realty Trust has higher revenue and earnings than Sotherly Hotels. Sotherly Hotels 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.

Summary

Empire State Realty Trust beats Sotherly Hotels on 10 of the 13 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 Sotherly Hotels

Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Sotherly may also opportunistically acquire hotels throughout the United States. Currently, the Company's portfolio consists of investments in ten hotel properties, comprising 2,786 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.