AVALONBAY COMMUNITIES INC (AVB)
US0534841012 - REIT
We assign a fundamental rating of 5 out of 10 to AVB. AVB was compared to 21 industry peers in the Residential REITs industry. While AVB belongs to the best of the industry regarding profitability, there are some minor 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.
Each year in the past 5 years AVB had a positive operating cash flow.
1.2 Ratios
The Return On Assets of AVB (4.48%) is better than 85.71% of its industry peers.
AVB has a Return On Equity of 7.87%. This is in the better half of the industry: AVB outperforms 71.43% of its industry peers.
With an excellent Return On Invested Capital value of 3.49%, AVB belongs to the best of the industry, outperforming 80.95% of the companies in the same industry.
AVB had an Average Return On Invested Capital over the past 3 years of 2.92%. This is in line with the industry average of 2.44%.
The 3 year average ROIC (2.92%) for AVB is below the current ROIC(3.49%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.48% | ||
| ROE | 7.87% | ||
| ROIC | 3.49% |
ROA(3y)4.96%
ROA(5y)4.85%
ROE(3y)8.98%
ROE(5y)8.64%
ROIC(3y)2.92%
ROIC(5y)3.21%
1.3 Margins
With an excellent Profit Margin value of 33.90%, AVB belongs to the best of the industry, outperforming 95.24% of the companies in the same industry.
In the last couple of years the Profit Margin of AVB has grown nicely.
Looking at the Operating Margin, with a value of 31.96%, AVB belongs to the top of the industry, outperforming 95.24% of the companies in the same industry.
In the last couple of years the Operating Margin of AVB has declined.
AVB's Gross Margin of 64.62% is amongst the best of the industry. AVB outperforms 80.95% of its industry peers.
AVB's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.96% | ||
| PM (TTM) | 33.9% | ||
| GM | 64.62% |
OM growth 3Y-5.61%
OM growth 5Y-3.93%
PM growth 3Y9.07%
PM growth 5Y1.55%
GM growth 3Y-1.21%
GM growth 5Y-0.56%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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 about the same debt/assets ratio as last year.
2.2 Solvency
An Altman-Z score of 1.98 indicates that AVB is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 1.98, AVB belongs to the top of the industry, outperforming 95.24% of the companies in the same industry.
The Debt to FCF ratio of AVB is 28.66, which is on the high side as it means it would take AVB, 28.66 years of fcf income to pay off all of its debts.
AVB has a Debt to FCF ratio of 28.66. This is in the better half of the industry: AVB outperforms 61.90% of its industry peers.
A Debt/Equity ratio of 0.68 indicates that AVB is somewhat dependend on debt financing.
AVB's Debt to Equity ratio of 0.68 is amongst the best of the industry. AVB outperforms 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | 28.66 | ||
| Altman-Z | 1.98 |
ROIC/WACC0.49
WACC7.18%
2.3 Liquidity
AVB has a Current Ratio of 0.91. This is a bad value and indicates that AVB is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.91, AVB perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
A Quick Ratio of 0.91 indicates that AVB may have some problems paying its short term obligations.
AVB has a Quick ratio of 0.91. This is comparable to the rest of the industry: AVB outperforms 57.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.91 |
3. Growth
3.1 Past
AVB shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -32.04%.
AVB shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.11% yearly.
AVB shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.23%.
The Revenue has been growing slightly by 3.74% on average over the past years.
EPS 1Y (TTM)-32.04%
EPS 3Y7.77%
EPS 5Y2.11%
EPS growth Q2Q-65.72%
Revenue 1Y (TTM)8.23%
Revenue growth 3Y3.71%
Revenue growth 5Y3.74%
Revenue growth Q2Q4.85%
3.2 Future
Based on estimates for the next years, AVB will show a small growth in Earnings Per Share. The EPS will grow by 1.36% on average per year.
Based on estimates for the next years, AVB will show a small growth in Revenue. The Revenue will grow by 6.36% on average per year.
EPS Next Y-14.63%
EPS Next 2Y-12.56%
EPS Next 3Y-6.43%
EPS Next 5Y1.36%
Revenue Next Year6.46%
Revenue Next 2Y5.59%
Revenue Next 3Y4.95%
Revenue Next 5Y6.36%
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
With a Price/Earnings ratio of 33.41, AVB can be considered very expensive at the moment.
Based on the Price/Earnings ratio, AVB is valued a bit cheaper than the industry average as 71.43% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 24.54, AVB is valued a bit more expensive.
Based on the Price/Forward Earnings ratio of 32.56, the valuation of AVB can be described as expensive.
90.48% of the companies in the same industry are more expensive than AVB, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 20.22. AVB is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.41 | ||
| Fwd PE | 32.56 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as AVB.
The rest of the industry has a similar Price/Free Cash Flow ratio as AVB.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 89.78 | ||
| EV/EBITDA | 19.22 |
4.3 Compensation for Growth
The excellent profitability rating of AVB may justify a higher PE ratio.
AVB's earnings are expected to decrease with -6.43% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)15.83
EPS Next 2Y-12.56%
EPS Next 3Y-6.43%
5. Dividend
5.1 Amount
AVB has a Yearly Dividend Yield of 3.76%.
AVB's Dividend Yield is slightly below the industry average, which is at 4.34.
AVB's Dividend Yield is a higher than the S&P500 average which is at 2.55.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.76% |
5.2 History
The dividend of AVB has a limited annual growth rate of 2.49%.
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)2.49%
Div Incr Years1
Div Non Decr Years14
5.3 Sustainability
98.29% of the earnings are spent on dividend by AVB. This is not a sustainable payout ratio.
AVB's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP98.29%
EPS Next 2Y-12.56%
EPS Next 3Y-6.43%
AVALONBAY COMMUNITIES INC
NYSE:AVB (12/8/2023, 7:04:00 PM)
After market: 175.75 0 (0%)175.75
+0.37 (+0.21%)
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 Cap24.96B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.76% |
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)
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EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
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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 | 33.41 | ||
| Fwd PE | 32.56 | ||
| 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)15.83
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.48% | ||
| ROE | 7.87% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 31.96% | ||
| PM (TTM) | 33.9% | ||
| GM | 64.62% | ||
| 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 | 0.91 | ||
| Quick Ratio | 0.91 | ||
| 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)-32.04%
EPS 3Y7.77%
EPS 5Y
EPS growth Q2Q
EPS Next Y-14.63%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)8.23%
Revenue growth 3Y3.71%
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