Financial Survey: DuPont Fabros Technology (DFT) & Empire State Realty Trust (ESRT)

DuPont Fabros Technology (NYSE: DFT) and Empire State Realty Trust (NYSE:ESRT) are both mid-cap financials companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Risk and Volatility

DuPont Fabros Technology has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Empire State Realty Trust has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.

Institutional and Insider Ownership

82.5% of Empire State Realty Trust shares are owned by institutional investors. 5.6% of DuPont Fabros Technology shares are owned by company insiders. Comparatively, 11.8% of Empire State Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares DuPont Fabros Technology and Empire State Realty Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DuPont Fabros Technology N/A N/A N/A $1.65 40.19
Empire State Realty Trust $678.00 million 4.80 $52.39 million $0.39 52.64

Empire State Realty Trust has higher revenue and earnings than DuPont Fabros Technology. DuPont Fabros Technology 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 for DuPont Fabros Technology and Empire State Realty Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DuPont Fabros Technology 0 8 3 0 2.27
Empire State Realty Trust 0 1 1 0 2.50

DuPont Fabros Technology presently has a consensus target price of $62.11, suggesting a potential downside of 6.33%. Empire State Realty Trust has a consensus target price of $22.33, suggesting a potential upside of 8.78%. Given Empire State Realty Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Empire State Realty Trust is more favorable than DuPont Fabros Technology.

Profitability

This table compares DuPont Fabros Technology and Empire State Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DuPont Fabros Technology 26.98% 17.13% 4.69%
Empire State Realty Trust 11.90% 3.98% 2.04%

Dividends

DuPont Fabros Technology pays an annual dividend of $2.00 per share and has a dividend yield of 3.0%. Empire State Realty Trust pays an annual dividend of $0.42 per share and has a dividend yield of 2.0%. DuPont Fabros Technology pays out 121.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Empire State Realty Trust pays out 107.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Empire State Realty Trust has increased its dividend for 5 consecutive years.

Summary

Empire State Realty Trust beats DuPont Fabros Technology on 9 of the 15 factors compared between the two stocks.

About DuPont Fabros Technology

DuPont Fabros Technology, Inc. (DFT) is a real estate investment trust (REIT). The Company owns, acquires, develops and operates wholesale data centers. The Company’s customers include national and international enterprises across various industries, such as technology, Internet, content providers, cloud providers, media, communications, healthcare and financial services. Its data centers are located in four population centers: Northern Virginia; suburban Chicago, Illinois; Piscataway, New Jersey, and Santa Clara, California. As of December 31, 2016, the Company owned various properties, including 11 operating data centers facilities; five phases of existing data center facilities under development; one shell of a data center under development; two data center facilities with a phase or phases available for development, and parcels of land held for development of four data centers. As of December 31, 2016, the Company’s 11 data centers had a total of 3.3 million gross square feet.

About Empire State Realty Trust

Empire State Realty Trust, Inc. is a real estate investment trust. The Company owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building. The Company operates through two segments: Real Estate and Observatory. The Real Estate segment includes all activities related to the ownership, management, operation, acquisition, repositioning and disposition of its real estate assets. The Observatory segment operates the 86th and 102nd floor observatories at the Empire State Building. As of December 31, 2016, its portfolio consisted of 14 office properties and six standalone retail properties totaling approximately 10.1 million rentable square feet. The Company’s properties include One Grand Central Place, 1400 Broadway, 111 West 33rd Street, 250 West 57th Street, 1359 Broadway and 1333 Broadway.

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