AVALONBAY COMMUNITIES INC (AVB)
US0534841012 - REIT
AVB gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 21 industry peers in the Residential REITs industry. While AVB has a great profitability rating, there are some minor concerns on its financial health. AVB is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
AVB had positive earnings in the past year.
In the past year AVB had a positive cash flow from operations.
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
AVB has a better Return On Assets (4.48%) than 80.95% of its industry peers.
Looking at the Return On Equity, with a value of 7.87%, AVB is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
AVB's Return On Invested Capital of 3.54% is amongst the best of the industry. AVB outperforms 80.95% of its industry peers.
AVB had an Average Return On Invested Capital over the past 3 years of 3.08%. This is in line with the industry average of 2.53%.
The last Return On Invested Capital (3.54%) for AVB is above the 3 year average (3.08%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.48% | ||
| ROE | 7.87% | ||
| ROIC | 3.54% |
ROA(3y)5.02%
ROA(5y)4.69%
ROE(3y)9.04%
ROE(5y)8.39%
ROIC(3y)3.08%
ROIC(5y)3.18%
1.3 Margins
AVB's Profit Margin of 33.50% is amongst the best of the industry. AVB outperforms 95.24% of its industry peers.
AVB's Profit Margin has declined in the last couple of years.
AVB's Operating Margin of 32.02% is amongst the best of the industry. AVB outperforms 95.24% of its industry peers.
In the last couple of years the Operating Margin of AVB has declined.
With an excellent Gross Margin value of 64.30%, AVB belongs to the best of the industry, outperforming 80.95% of the companies in the same industry.
In the last couple of years the Gross Margin of AVB has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 32.02% | ||
| PM (TTM) | 33.5% | ||
| GM | 64.3% |
OM growth 3Y1.22%
OM growth 5Y-2.41%
PM growth 3Y-2.26%
PM growth 5Y-4.66%
GM growth 3Y0.03%
GM growth 5Y-0.6%
2. Health
2.1 Basic Checks
AVB has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
AVB has more shares outstanding than it did 1 year ago.
The number of shares outstanding for AVB has been increased compared to 5 years ago.
AVB has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.04 indicates that AVB is not a great score, but indicates only limited risk for bankruptcy at the moment.
With an excellent Altman-Z score value of 2.04, AVB belongs to the best of the industry, outperforming 95.24% of the companies in the same industry.
AVB has a debt to FCF ratio of 32.66. This is a negative value and a sign of low solvency as AVB would need 32.66 years to pay back of all of its debts.
AVB's Debt to FCF ratio of 32.66 is fine compared to the rest of the industry. AVB outperforms 66.67% of its industry peers.
A Debt/Equity ratio of 0.68 indicates that AVB is somewhat dependend on debt financing.
The Debt to Equity ratio of AVB (0.68) is better than 80.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 32.66 | ||
| Altman-Z | 2.04 |
ROIC/WACC0.48
WACC7.45%
2.3 Liquidity
AVB has a Current Ratio of 0.86. 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 Current ratio (0.86) which is comparable to the rest of the industry.
A Quick Ratio of 0.86 indicates that AVB may have some problems paying its short term obligations.
AVB's Quick ratio of 0.86 is in line compared to the rest of the industry. AVB outperforms 57.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
AVB shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -25.78%.
The Earnings Per Share has been decreasing by -5.76% on average over the past years.
Looking at the last year, AVB shows a small growth in Revenue. The Revenue has grown by 6.72% in the last year.
Measured over the past years, AVB shows a small growth in Revenue. The Revenue has been growing by 3.91% on average per year.
EPS 1Y (TTM)-25.78%
EPS 3Y-3.82%
EPS 5Y-5.76%
EPS growth Q2Q-1.16%
Revenue 1Y (TTM)6.72%
Revenue growth 3Y6.35%
Revenue growth 5Y3.91%
Revenue growth Q2Q5.23%
3.2 Future
The Earnings Per Share is expected to grow by 8.66% on average over the next years. This is quite good.
AVB is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.23% yearly.
EPS Next Y-5.41%
EPS Next 2Y1.38%
EPS Next 3Y4.05%
EPS Next 5Y8.66%
Revenue Next Year4.09%
Revenue Next 2Y4.42%
Revenue Next 3Y4.76%
Revenue Next 5Y6.23%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 35.14 indicates a quite expensive valuation of AVB.
Based on the Price/Earnings ratio, AVB is valued a bit cheaper than 76.19% of the companies in the same industry.
AVB's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 24.80.
Based on the Price/Forward Earnings ratio of 37.15, the valuation of AVB can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AVB indicates a rather cheap valuation: AVB is cheaper than 85.71% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.27. AVB is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.14 | ||
| Fwd PE | 37.15 |
4.2 Price Multiples
AVB's Enterprise Value to EBITDA ratio is in line with the industry average.
AVB's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 106.73 | ||
| EV/EBITDA | 19.64 |
4.3 Compensation for Growth
AVB has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y1.38%
EPS Next 3Y4.05%
5. Dividend
5.1 Amount
AVB has a Yearly Dividend Yield of 3.66%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.44, AVB is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.40, AVB pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.66% |
5.2 History
The dividend of AVB has a limited annual growth rate of 2.39%.
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)2.39%
Div Incr Years1
Div Non Decr Years14
5.3 Sustainability
AVB pays out 99.52% of its income as dividend. This is not a sustainable payout ratio.
The dividend of AVB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP99.52%
EPS Next 2Y1.38%
EPS Next 3Y4.05%
AVALONBAY COMMUNITIES INC
NYSE:AVB (4/19/2024, 3:02:30 PM)
After market: 184.13 0 (0%)184.13
+2.11 (+1.16%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap26.15B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.66% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.14 | ||
| Fwd PE | 37.15 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.48% | ||
| ROE | 7.87% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 32.02% | ||
| PM (TTM) | 33.5% | ||
| GM | 64.3% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.13
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.86 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-25.78%
EPS 3Y-3.82%
EPS 5Y
EPS growth Q2Q
EPS Next Y-5.41%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)6.72%
Revenue growth 3Y6.35%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y