Comparing Great Ajax (NYSE:AJX) and Empire State Realty Trust (NYSE:ESRT)

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

Risk and Volatility

Great Ajax has a beta of 1.81, suggesting that its stock price is 81% more volatile than the S&P 500. Comparatively, Empire State Realty Trust has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.

Valuation and Earnings

This table compares Great Ajax and Empire State Realty Trust’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Great Ajax	-$18.95 million	-8.42	-$15.01 million	($1.86)	-3.63
Empire State Realty Trust	$720.15 million	1.96	$40.64 million	$0.29	30.28

Empire State Realty Trust has higher revenue and earnings than Great Ajax. Great Ajax 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.

Dividends

Great Ajax pays an annual dividend of $0.80 per share and has a dividend yield of 11.9%. Empire State Realty Trust pays an annual dividend of $0.14 per share and has a dividend yield of 1.6%. Great Ajax pays out -43.0% of its earnings in the form of a dividend. Empire State Realty Trust pays out 48.3% 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. Great Ajax is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Great Ajax and Empire State Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Great Ajax	-72.24%	1.72%	0.35%
Empire State Realty Trust	6.75%	2.88%	1.16%

Insider and Institutional Ownership

58.6% of Great Ajax shares are held by institutional investors. Comparatively, 80.4% of Empire State Realty Trust shares are held by institutional investors. 3.8% of Great Ajax shares are held by company insiders. Comparatively, 14.0% of Empire State Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Great Ajax and Empire State Realty Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Great Ajax	0	1	2	0	2.67
Empire State Realty Trust	1	1	3	0	2.40

Great Ajax presently has a consensus target price of $9.88, indicating a potential upside of 46.30%. Empire State Realty Trust has a consensus target price of $8.85, indicating a potential upside of 0.80%. Given Great Ajax’s stronger consensus rating and higher probable upside, research analysts plainly believe Great Ajax is more favorable than Empire State Realty Trust.

Summary

Empire State Realty Trust beats Great Ajax on 11 of the 16 factors compared between the two stocks.

About Great Ajax

Great Ajax Corp. operates as a mortgage real estate investment trust. It acquires re-performing and non-performing loans; acquires or originates small balance commercial mortgage loans that are secured by multi-family residential and commercial mixed use retail/residential properties; and invests in single-family and smaller commercial properties. The company elected to be taxed as a real estate investment trust for U.S. federal income tax purposes. It generally would not be subject to federal corporate income taxes, if it distributes at least 90% of its taxable income to its stockholders. Great Ajax Corp. was incorporated in 2014 and is based in Tigard, Oregon.

About Empire State Realty Trust

Empire State Realty Trust, Inc. (NYSE: ESRT) is a REIT that owns and manages office, retail and multifamily assets in Manhattan and the greater New York metropolitan area. ESRT owns the iconic Empire State Building the World's Most Famous Building and the newly reimagined Empire State Building Observatory that was named #1 attraction in the US for the second year in a row, in Tripadvisor's 2023 Travelers' Choice Awards: Best of the Best. The company is a leader in healthy buildings, energy efficiency, and indoor environmental quality. As of June 30, 2023, ESRT's portfolio is comprised of approximately 8.6 million rentable square feet of office space, 718,000 rentable square feet of retail space and 721 residential units across three multifamily properties.