AVALONBAY COMMUNITIES INC (AVB) Stock Fundamental Analysis
NYSE:AVB - New York Stock Exchange, Inc. - US0534841012 - REIT - Currency: USD
AVB gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 20 industry peers in the Residential REITs industry. While AVB has a great profitability rating, there are quite some concerns on its financial health. While showing a medium growth rate, AVB is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
AVB had positive earnings in the past year.
AVB had a positive operating cash flow in the past year.
AVB had positive earnings in each of the past 5 years.
In the past 5 years AVB always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of AVB (5.39%) is better than 95.00% of its industry peers.
Looking at the Return On Equity, with a value of 9.59%, AVB belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
With an excellent Return On Invested Capital value of 3.63%, AVB belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AVB is in line with the industry average of 2.62%.
The last Return On Invested Capital (3.63%) for AVB is above the 3 year average (3.44%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.39% | ||
| ROE | 9.59% | ||
| ROIC | 3.63% |
ROA(3y)5.06%
ROA(5y)4.9%
ROE(3y)9%
ROE(5y)8.77%
ROIC(3y)3.44%
ROIC(5y)3.18%
1.3 Margins
The Profit Margin of AVB (38.79%) is better than 100.00% of its industry peers.
AVB's Profit Margin has improved in the last couple of years.
AVB has a better Operating Margin (31.58%) than 95.00% of its industry peers.
In the last couple of years the Operating Margin of AVB has declined.
Looking at the Gross Margin, with a value of 63.13%, AVB is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
AVB's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.58% | ||
| PM (TTM) | 38.79% | ||
| GM | 63.13% |
OM growth 3Y5.59%
OM growth 5Y-2.68%
PM growth 3Y-5.32%
PM growth 5Y1.91%
GM growth 3Y0.2%
GM growth 5Y-1.16%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AVB is destroying value.
Compared to 1 year ago, AVB has about the same amount of shares outstanding.
Compared to 5 years ago, AVB has more shares outstanding
AVB has a better debt/assets ratio than last year.
2.2 Solvency
AVB has an Altman-Z score of 2.10. This is not the best score and indicates that AVB is in the grey zone with still only limited risk for bankruptcy at the moment.
AVB has a Altman-Z score of 2.10. This is amongst the best in the industry. AVB outperforms 95.00% of its industry peers.
AVB has a Debt/Equity ratio of 0.70. This is a neutral value indicating AVB is somewhat dependend on debt financing.
AVB has a better Debt to Equity ratio (0.70) than 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.1 |
ROIC/WACC0.48
WACC7.54%
2.3 Liquidity
AVB has a Current Ratio of 0.05. This is a bad value and indicates that AVB is not financially healthy enough and could expect problems in meeting its short term obligations.
AVB's Current ratio of 0.05 is on the low side compared to the rest of the industry. AVB is outperformed by 85.00% of its industry peers.
AVB has a Quick Ratio of 0.05. This is a bad value and indicates that AVB is not financially healthy enough and could expect problems in meeting its short term obligations.
AVB has a worse Quick ratio (0.05) than 85.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.05 | ||
| Quick Ratio | 0.05 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 48.43% over the past year.
Measured over the past 5 years, AVB shows a small growth in Earnings Per Share. The EPS has been growing by 6.12% on average per year.
The Revenue has been growing slightly by 5.01% in the past year.
Measured over the past years, AVB shows a small growth in Revenue. The Revenue has been growing by 4.62% on average per year.
EPS 1Y (TTM)48.43%
EPS 3Y17.41%
EPS 5Y6.12%
EPS Q2Q%36.07%
Revenue 1Y (TTM)5.01%
Revenue growth 3Y8.28%
Revenue growth 5Y4.62%
Sales Q2Q%4.65%
3.2 Future
Based on estimates for the next years, AVB will show a decrease in Earnings Per Share. The EPS will decrease by -2.56% on average per year.
AVB is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.29% yearly.
EPS Next Y-21.85%
EPS Next 2Y-12.81%
EPS Next 3Y-6.36%
EPS Next 5Y-2.56%
Revenue Next Year4.71%
Revenue Next 2Y4.92%
Revenue Next 3Y5.11%
Revenue Next 5Y6.29%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 25.30, which means the current valuation is very expensive for AVB.
100.00% of the companies in the same industry are more expensive than AVB, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.93, AVB is valued at the same level.
With a Price/Forward Earnings ratio of 35.20, AVB can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, AVB is valued cheaper than 90.00% of the companies in the same industry.
AVB is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 37.78, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.3 | ||
| Fwd PE | 35.2 |
4.2 Price Multiples
AVB's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. AVB is more expensive than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 20.51 |
4.3 Compensation for Growth
The excellent profitability rating of AVB may justify a higher PE ratio.
A cheap valuation may be justified as AVB's earnings are expected to decrease with -6.36% in the coming years.
PEG (NY)N/A
PEG (5Y)4.13
EPS Next 2Y-12.81%
EPS Next 3Y-6.36%
5. Dividend
5.1 Amount
AVB has a Yearly Dividend Yield of 3.44%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.67, AVB's dividend is way lower than its industry peers. On top of this 85.00% of the companies listed in the same industry pay a better dividend than AVB!
AVB's Dividend Yield is a higher than the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.44% |
5.2 History
The dividend of AVB has a limited annual growth rate of 2.45%.
AVB has paid a dividend for at least 10 years, which is a reliable track record.
AVB has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)2.45%
Div Incr Years2
Div Non Decr Years26
5.3 Sustainability
AVB pays out 84.74% of its income as dividend. This is not a sustainable payout ratio.
The Dividend Rate of AVB has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP84.74%
EPS Next 2Y-12.81%
EPS Next 3Y-6.36%
203.12
+4.35 (+2.19%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners95.95%
Inst Owner Change-0.03%
Ins Owners0.37%
Ins Owner Change6.25%
Market Cap28.92B
Analysts72.14
Price Target234.54 (15.47%)
Short Float %2.23%
Short Ratio3.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.44% |
Yearly Dividend6.77
Dividend Growth(5Y)2.45%
DP84.74%
Div Incr Years2
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)32.26%
Min EPS beat(2)23.58%
Max EPS beat(2)40.95%
EPS beat(4)4
Avg EPS beat(4)45.74%
Min EPS beat(4)23.58%
Max EPS beat(4)78.32%
EPS beat(8)6
Avg EPS beat(8)23.86%
EPS beat(12)9
Avg EPS beat(12)31.52%
EPS beat(16)11
Avg EPS beat(16)30.51%
Revenue beat(2)0
Avg Revenue beat(2)-1%
Min Revenue beat(2)-1.14%
Max Revenue beat(2)-0.86%
Revenue beat(4)0
Avg Revenue beat(4)-0.75%
Min Revenue beat(4)-1.14%
Max Revenue beat(4)-0.13%
Revenue beat(8)0
Avg Revenue beat(8)-2.76%
Revenue beat(12)1
Avg Revenue beat(12)-2.53%
Revenue beat(16)3
Avg Revenue beat(16)-1.82%
PT rev (1m)-0.23%
PT rev (3m)-1.93%
EPS NQ rev (1m)-5.16%
EPS NQ rev (3m)-15.36%
EPS NY rev (1m)1.94%
EPS NY rev (3m)2.63%
Revenue NQ rev (1m)-0.19%
Revenue NQ rev (3m)0.2%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.3 | ||
| Fwd PE | 35.2 | ||
| P/S | 9.81 | ||
| P/FCF | N/A | ||
| P/OCF | 17.95 | ||
| P/B | 2.43 | ||
| P/tB | 2.43 | ||
| EV/EBITDA | 20.51 |
EPS(TTM)8.03
EY3.95%
EPS(NY)5.77
Fwd EY2.84%
FCF(TTM)-1.61
FCFYN/A
OCF(TTM)11.31
OCFY5.57%
SpS20.7
BVpS83.7
TBVpS83.7
PEG (NY)N/A
PEG (5Y)4.13
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.39% | ||
| ROE | 9.59% | ||
| ROCE | 4.6% | ||
| ROIC | 3.63% | ||
| ROICexc | 3.64% | ||
| ROICexgc | 3.64% | ||
| OM | 31.58% | ||
| PM (TTM) | 38.79% | ||
| GM | 63.13% | ||
| FCFM | N/A |
ROA(3y)5.06%
ROA(5y)4.9%
ROE(3y)9%
ROE(5y)8.77%
ROIC(3y)3.44%
ROIC(5y)3.18%
ROICexc(3y)3.5%
ROICexc(5y)3.24%
ROICexgc(3y)3.51%
ROICexgc(5y)3.24%
ROCE(3y)4.35%
ROCE(5y)4.03%
ROICexcg growth 3Y11.75%
ROICexcg growth 5Y0.03%
ROICexc growth 3Y11.82%
ROICexc growth 5Y0.06%
OM growth 3Y5.59%
OM growth 5Y-2.68%
PM growth 3Y-5.32%
PM growth 5Y1.91%
GM growth 3Y0.2%
GM growth 5Y-1.16%
F-Score5
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.67 | ||
| Cap/Depr | 215.91% | ||
| Cap/Sales | 62.46% | ||
| Interest Coverage | 4.3 | ||
| Cash Conversion | 90.35% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.05 | ||
| Quick Ratio | 0.05 | ||
| Altman-Z | 2.1 |
F-Score5
WACC7.54%
ROIC/WACC0.48
Cap/Depr(3y)183.94%
Cap/Depr(5y)179.75%
Cap/Sales(3y)55.28%
Cap/Sales(5y)55.46%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)48.43%
EPS 3Y17.41%
EPS 5Y6.12%
EPS Q2Q%36.07%
EPS Next Y-21.85%
EPS Next 2Y-12.81%
EPS Next 3Y-6.36%
EPS Next 5Y-2.56%
Revenue 1Y (TTM)5.01%
Revenue growth 3Y8.28%
Revenue growth 5Y4.62%
Sales Q2Q%4.65%
Revenue Next Year4.71%
Revenue Next 2Y4.92%
Revenue Next 3Y5.11%
Revenue Next 5Y6.29%
EBIT growth 1Y3.31%
EBIT growth 3Y14.34%
EBIT growth 5Y1.82%
EBIT Next Year80.43%
EBIT Next 3Y26.74%
EBIT Next 5Y17.25%
FCF growth 1Y-265.74%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y9.26%
OCF growth 3Y10.15%
OCF growth 5Y4%