AVALONBAY COMMUNITIES INC (AVB) Stock Fundamental Analysis
NYSE:AVB - New York Stock Exchange, Inc. - US0534841012 - REIT - Currency: USD
Overall AVB gets a fundamental rating of 5 out of 10. We evaluated AVB against 20 industry peers in the Residential REITs industry. AVB has an excellent profitability rating, but there are 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
In the past year AVB was profitable.
In the past year AVB had a positive cash flow from operations.
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
With an excellent Return On Assets value of 5.14%, AVB belongs to the best of the industry, outperforming 95.00% of the companies in the same industry.
AVB's Return On Equity of 9.04% is amongst the best of the industry. AVB outperforms 85.00% of its industry peers.
AVB has a Return On Invested Capital of 3.61%. This is amongst the best in the industry. AVB outperforms 90.00% of its industry peers.
AVB had an Average Return On Invested Capital over the past 3 years of 3.44%. This is in line with the industry average of 2.75%.
The last Return On Invested Capital (3.61%) for AVB is above the 3 year average (3.44%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.14% | ||
| ROE | 9.04% | ||
| ROIC | 3.61% |
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
Looking at the Profit Margin, with a value of 37.06%, AVB belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
AVB's Profit Margin has improved in the last couple of years.
AVB's Operating Margin of 31.43% is amongst the best of the industry. AVB outperforms 95.00% of its industry peers.
AVB's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 63.16%, 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 | 31.43% | ||
| PM (TTM) | 37.06% | ||
| GM | 63.16% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AVB is destroying value.
AVB has about the same amout of shares outstanding than it did 1 year ago.
AVB has more shares outstanding than it did 5 years ago.
The debt/assets ratio for AVB has been reduced compared to a year ago.
2.2 Solvency
AVB has an Altman-Z score of 2.20. 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.
The Altman-Z score of AVB (2.20) is better than 95.00% of its industry peers.
A Debt/Equity ratio of 0.68 indicates that AVB is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.68, AVB belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.2 |
ROIC/WACC0.48
WACC7.56%
2.3 Liquidity
A Current Ratio of 0.11 indicates that AVB may have some problems paying its short term obligations.
The Current ratio of AVB (0.11) is worse than 75.00% of its industry peers.
AVB has a Quick Ratio of 0.11. 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 Quick ratio of 0.11 is on the low side compared to the rest of the industry. AVB is outperformed by 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.11 | ||
| Quick Ratio | 0.11 |
3. Growth
3.1 Past
AVB shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 70.06%, which is quite impressive.
AVB shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.12% yearly.
AVB shows a small growth in Revenue. In the last year, the Revenue has grown by 5.27%.
The Revenue has been growing slightly by 4.62% on average over the past years.
EPS 1Y (TTM)70.06%
EPS 3Y17.41%
EPS 5Y6.12%
EPS Q2Q%131.97%
Revenue 1Y (TTM)5.27%
Revenue growth 3Y8.28%
Revenue growth 5Y4.62%
Sales Q2Q%4.9%
3.2 Future
AVB is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -2.59% yearly.
The Revenue is expected to grow by 6.76% on average over the next years.
EPS Next Y-23.85%
EPS Next 2Y-11.82%
EPS Next 3Y-5.92%
EPS Next 5Y-2.59%
Revenue Next Year4.88%
Revenue Next 2Y5.11%
Revenue Next 3Y5.41%
Revenue Next 5Y6.76%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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
Based on the Price/Earnings ratio of 21.91, the valuation of AVB can be described as rather expensive.
Based on the Price/Earnings ratio, AVB is valued cheaper than 100.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 24.85, AVB is valued at the same level.
Based on the Price/Forward Earnings ratio of 34.16, the valuation of AVB can be described as expensive.
AVB's Price/Forward Earnings ratio is rather cheap when compared to the industry. AVB is cheaper than 90.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.89. AVB is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.91 | ||
| Fwd PE | 34.16 |
4.2 Price Multiples
70.00% of the companies in the same industry are cheaper than AVB, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 21.07 |
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 -5.92% in the coming years.
PEG (NY)N/A
PEG (5Y)3.58
EPS Next 2Y-11.82%
EPS Next 3Y-5.92%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.42%, AVB has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.45, AVB is paying slightly less dividend.
AVB's Dividend Yield is a higher than the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.42% |
5.2 History
The dividend of AVB has a limited annual growth rate of 2.45%.
AVB has been paying a dividend for at least 10 years, so it has 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
89.07% of the earnings are spent on dividend by AVB. 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.
DP89.07%
EPS Next 2Y-11.82%
EPS Next 3Y-5.92%
201.6
-3.1 (-1.51%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners96.5%
Inst Owner Change-0.57%
Ins Owners0.33%
Ins Owner Change1.86%
Market Cap28.70B
Analysts72.14
Price Target236.8 (17.46%)
Short Float %2.08%
Short Ratio3.43
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.42% |
Yearly Dividend6.77
Dividend Growth(5Y)2.45%
DP89.07%
Div Incr Years2
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)59.64%
Min EPS beat(2)40.95%
Max EPS beat(2)78.32%
EPS beat(4)4
Avg EPS beat(4)40.67%
Min EPS beat(4)3.33%
Max EPS beat(4)78.32%
EPS beat(8)5
Avg EPS beat(8)19.9%
EPS beat(12)8
Avg EPS beat(12)28.97%
EPS beat(16)11
Avg EPS beat(16)31.38%
Revenue beat(2)0
Avg Revenue beat(2)-0.99%
Min Revenue beat(2)-1.14%
Max Revenue beat(2)-0.85%
Revenue beat(4)0
Avg Revenue beat(4)-0.57%
Min Revenue beat(4)-1.14%
Max Revenue beat(4)-0.13%
Revenue beat(8)0
Avg Revenue beat(8)-3.63%
Revenue beat(12)1
Avg Revenue beat(12)-2.5%
Revenue beat(16)3
Avg Revenue beat(16)-1.8%
PT rev (1m)-2.62%
PT rev (3m)-2.84%
EPS NQ rev (1m)11.4%
EPS NQ rev (3m)10.41%
EPS NY rev (1m)-0.4%
EPS NY rev (3m)4.64%
Revenue NQ rev (1m)2.07%
Revenue NQ rev (3m)1.34%
Revenue NY rev (1m)0.23%
Revenue NY rev (3m)0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.91 | ||
| Fwd PE | 34.16 | ||
| P/S | 9.85 | ||
| P/FCF | N/A | ||
| P/OCF | 17.85 | ||
| P/B | 2.4 | ||
| P/tB | 2.4 | ||
| EV/EBITDA | 21.07 |
EPS(TTM)9.2
EY4.56%
EPS(NY)5.9
Fwd EY2.93%
FCF(TTM)-0.04
FCFYN/A
OCF(TTM)11.29
OCFY5.6%
SpS20.47
BVpS83.87
TBVpS83.87
PEG (NY)N/A
PEG (5Y)3.58
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.14% | ||
| ROE | 9.04% | ||
| ROCE | 4.57% | ||
| ROIC | 3.61% | ||
| ROICexc | 3.63% | ||
| ROICexgc | 3.63% | ||
| OM | 31.43% | ||
| PM (TTM) | 37.06% | ||
| GM | 63.16% | ||
| 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-Score6
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.68 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.59 | ||
| Cap/Depr | 190.53% | ||
| Cap/Sales | 55.38% | ||
| Interest Coverage | 4.29 | ||
| Cash Conversion | 91.22% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.11 | ||
| Quick Ratio | 0.11 | ||
| Altman-Z | 2.2 |
F-Score6
WACC7.56%
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)70.06%
EPS 3Y17.41%
EPS 5Y6.12%
EPS Q2Q%131.97%
EPS Next Y-23.85%
EPS Next 2Y-11.82%
EPS Next 3Y-5.92%
EPS Next 5Y-2.59%
Revenue 1Y (TTM)5.27%
Revenue growth 3Y8.28%
Revenue growth 5Y4.62%
Sales Q2Q%4.9%
Revenue Next Year4.88%
Revenue Next 2Y5.11%
Revenue Next 3Y5.41%
Revenue Next 5Y6.76%
EBIT growth 1Y3.32%
EBIT growth 3Y14.34%
EBIT growth 5Y1.82%
EBIT Next Year79.68%
EBIT Next 3Y26.76%
EBIT Next 5Y17.18%
FCF growth 1Y-102.31%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y3.07%
OCF growth 3Y10.15%
OCF growth 5Y4%