Empire State Realty OP (ARCA:ESBA) is in focus after Empire State Realty Trust’s board declared cash dividends for the third quarter of 2026 on both common stock and multiple operating partnership units, including several ESRO unit series.

The dividend decision comes at a weaker time for Empire State Realty OP’s units, with the latest share price at $4.60 and the year-to-date share price return down 26.4%. The 1-year total shareholder return has declined 35.23%, which suggests that investors may be reassessing both growth prospects and risk, even as income from regular distributions remains part of the investment case.

If this dividend news has you reassessing where to put fresh capital, it may help to broaden your search and uncover opportunities in 20 top founder-led companies

Bulls may highlight that Empire State Realty OP is trading at what appears to be a steep discount to some measures of value. Bears may emphasize the long period of weak returns. As you assess valuation next, which side do the numbers appear to support?

Preferred Price-To-Sales Multiple of 1.7x: Is it justified?

On a simple snapshot, Empire State Realty OP is trading on a P/S of 1.7x, compared with peer and industry figures that sit materially higher. At a last close of $4.60, that lower multiple lines up with its sizeable intrinsic discount of 66.6% to the SWS DCF estimate of $13.78, which will catch the eye of value focused investors.

The P/S ratio compares the company’s market value with its revenue. For a real estate focused business like Empire State Realty OP, where earnings can be distorted by one off items, investors often look at P/S to anchor expectations to the top line. A lower P/S can suggest the market is pricing in weaker growth or higher risk relative to peers, rather than assigning a premium to its revenue base.

Here, ESBA’s 1.7x P/S sits well below the peer average of 4x and also below the broader North American REITs industry average of 3.3x. That is a sizeable gap. It implies the market currently values each dollar of Empire State Realty OP revenue at a significant discount to comparable REITs, which some investors may see as conservative pricing that could shift if sentiment or earnings quality improve over time.

Result: Price-to-Sales of 1.7x (UNDERVALUED)

However, investors still face pressure from Empire State Realty OP’s long stretch of weak multi year total returns and its modest US$5.06m net income on US$782.82m revenue.

Another View on Empire State Realty OP’s Value

The SWS DCF model paints an even starker picture than the P/S ratio. At a last close of $4.60, Empire State Realty OP trades about 66.6% below an estimated fair value of $13.78. That points to a wide gap. The key question is whether the cash flow assumptions prove too cautious or too optimistic.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Empire State Realty OP for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 50 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With mixed signals around Empire State Realty OP’s valuation and past returns, it makes sense to inspect the underlying data yourself and decide where you stand. To see both the potential upside and the main concerns shaping sentiment, review the 1 key reward and 4 important warning signs

Looking for more investment ideas beyond Empire State Realty OP?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.