EQUITY RESIDENTIAL (EQR) Stock Fundamental Analysis
NYSE:EQR - New York Stock Exchange, Inc. - US29476L1070 - REIT - Currency: USD
We assign a fundamental rating of 4 out of 10 to EQR. EQR was compared to 20 industry peers in the Residential REITs industry. EQR scores excellent on profitability, but there are concerns on its financial health. EQR is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
EQR had positive earnings in the past year.
In the past year EQR had a positive cash flow from operations.
In the past 5 years EQR has always been profitable.
Each year in the past 5 years EQR had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 4.84%, EQR is doing good in the industry, outperforming 80.00% of the companies in the same industry.
The Return On Equity of EQR (9.01%) is better than 75.00% of its industry peers.
EQR's Return On Invested Capital of 3.43% is fine compared to the rest of the industry. EQR outperforms 80.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for EQR is in line with the industry average of 2.62%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.84% | ||
| ROE | 9.01% | ||
| ROIC | 3.43% |
ROA(3y)4.31%
ROA(5y)4.74%
ROE(3y)7.93%
ROE(5y)8.91%
ROIC(3y)3.44%
ROIC(5y)3.17%
1.3 Margins
EQR has a Profit Margin of 33.06%. This is amongst the best in the industry. EQR outperforms 85.00% of its industry peers.
In the last couple of years the Profit Margin of EQR has remained more or less at the same level.
Looking at the Operating Margin, with a value of 28.42%, EQR is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
In the last couple of years the Operating Margin of EQR has declined.
EQR has a better Gross Margin (63.22%) than 90.00% of its industry peers.
In the last couple of years the Gross Margin of EQR has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.42% | ||
| PM (TTM) | 33.06% | ||
| GM | 63.22% |
OM growth 3Y5.12%
OM growth 5Y-2.76%
PM growth 3Y-13.73%
PM growth 5Y-0.66%
GM growth 3Y0.95%
GM growth 5Y-0.95%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), EQR is destroying value.
The number of shares outstanding for EQR remains at a similar level compared to 1 year ago.
EQR has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, EQR has a worse debt to assets ratio.
2.2 Solvency
EQR has an Altman-Z score of 1.83. This is not the best score and indicates that EQR is in the grey zone with still only limited risk for bankruptcy at the moment.
EQR has a Altman-Z score of 1.83. This is amongst the best in the industry. EQR outperforms 85.00% of its industry peers.
EQR has a Debt/Equity ratio of 0.71. This is a neutral value indicating EQR is somewhat dependend on debt financing.
EQR has a Debt to Equity ratio of 0.71. This is in the better half of the industry: EQR outperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.83 |
ROIC/WACC0.47
WACC7.32%
2.3 Liquidity
A Current Ratio of 0.03 indicates that EQR may have some problems paying its short term obligations.
EQR's Current ratio of 0.03 is on the low side compared to the rest of the industry. EQR is outperformed by 90.00% of its industry peers.
EQR has a Quick Ratio of 0.03. This is a bad value and indicates that EQR is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.03, EQR is doing worse than 90.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.03 | ||
| Quick Ratio | 0.03 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 25.10% over the past year.
Measured over the past 5 years, EQR shows a small growth in Earnings Per Share. The EPS has been growing by 0.98% on average per year.
The Revenue has been growing slightly by 4.40% in the past year.
The Revenue has been growing slightly by 1.99% on average over the past years.
EPS 1Y (TTM)25.1%
EPS 3Y-8.41%
EPS 5Y0.98%
EPS Q2Q%110.64%
Revenue 1Y (TTM)4.4%
Revenue growth 3Y6.54%
Revenue growth 5Y1.99%
Sales Q2Q%4.72%
3.2 Future
The Earnings Per Share is expected to decrease by -11.05% on average over the next years. This is quite bad
The Revenue is expected to grow by 4.88% on average over the next years.
EPS Next Y-41.87%
EPS Next 2Y-29.75%
EPS Next 3Y-17.25%
EPS Next 5Y-11.05%
Revenue Next Year4.57%
Revenue Next 2Y4.42%
Revenue Next 3Y4.27%
Revenue Next 5Y4.88%
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
Based on the Price/Earnings ratio of 20.13, the valuation of EQR can be described as rather expensive.
95.00% of the companies in the same industry are more expensive than EQR, based on the Price/Earnings ratio.
EQR is valuated rather cheaply when we compare the Price/Earnings ratio to 26.48, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 47.08, the valuation of EQR can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EQR is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of EQR to the average of the S&P500 Index (34.04), we can say EQR is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.13 | ||
| Fwd PE | 47.08 |
4.2 Price Multiples
75.00% of the companies in the same industry are more expensive than EQR, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 17.14 |
4.3 Compensation for Growth
The decent profitability rating of EQR may justify a higher PE ratio.
EQR's earnings are expected to decrease with -17.25% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)20.45
EPS Next 2Y-29.75%
EPS Next 3Y-17.25%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.34%, EQR is a good candidate for dividend investing.
EQR's Dividend Yield is comparable with the industry average which is at 4.77.
EQR's Dividend Yield is rather good when compared to the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.34% |
5.2 History
The dividend of EQR has a limited annual growth rate of 3.64%.
EQR has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)3.64%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
103.08% of the earnings are spent on dividend by EQR. This is not a sustainable payout ratio.
EQR's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP103.08%
EPS Next 2Y-29.75%
EPS Next 3Y-17.25%
63.2
-0.69 (-1.08%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners95.24%
Inst Owner Change-0.27%
Ins Owners0.51%
Ins Owner Change0.99%
Market Cap24.01B
Analysts72.41
Price Target78 (23.42%)
Short Float %1.43%
Short Ratio2.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.34% |
Yearly Dividend2.69
Dividend Growth(5Y)3.64%
DP103.08%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)142.17%
Min EPS beat(2)124.52%
Max EPS beat(2)159.82%
EPS beat(4)3
Avg EPS beat(4)73.87%
Min EPS beat(4)-10.24%
Max EPS beat(4)159.82%
EPS beat(8)6
Avg EPS beat(8)65.49%
EPS beat(12)10
Avg EPS beat(12)70.33%
EPS beat(16)13
Avg EPS beat(16)92.75%
Revenue beat(2)1
Avg Revenue beat(2)-0.69%
Min Revenue beat(2)-1.81%
Max Revenue beat(2)0.43%
Revenue beat(4)1
Avg Revenue beat(4)-0.7%
Min Revenue beat(4)-1.81%
Max Revenue beat(4)0.43%
Revenue beat(8)1
Avg Revenue beat(8)-0.77%
Revenue beat(12)2
Avg Revenue beat(12)-0.68%
Revenue beat(16)5
Avg Revenue beat(16)-0.42%
PT rev (1m)-1.16%
PT rev (3m)-0.75%
EPS NQ rev (1m)9.7%
EPS NQ rev (3m)16.47%
EPS NY rev (1m)0%
EPS NY rev (3m)19.43%
Revenue NQ rev (1m)0.01%
Revenue NQ rev (3m)-0.31%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.13 | ||
| Fwd PE | 47.08 | ||
| P/S | 7.98 | ||
| P/FCF | N/A | ||
| P/OCF | 15.22 | ||
| P/B | 2.17 | ||
| P/tB | 2.17 | ||
| EV/EBITDA | 17.14 |
EPS(TTM)3.14
EY4.97%
EPS(NY)1.34
Fwd EY2.12%
FCF(TTM)-1.17
FCFYN/A
OCF(TTM)4.15
OCFY6.57%
SpS7.92
BVpS29.08
TBVpS29.08
PEG (NY)N/A
PEG (5Y)20.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.84% | ||
| ROE | 9.01% | ||
| ROCE | 4.41% | ||
| ROIC | 3.43% | ||
| ROICexc | 3.44% | ||
| ROICexgc | 3.48% | ||
| OM | 28.42% | ||
| PM (TTM) | 33.06% | ||
| GM | 63.22% | ||
| FCFM | N/A |
ROA(3y)4.31%
ROA(5y)4.74%
ROE(3y)7.93%
ROE(5y)8.91%
ROIC(3y)3.44%
ROIC(5y)3.17%
ROICexc(3y)3.45%
ROICexc(5y)3.18%
ROICexgc(3y)3.5%
ROICexgc(5y)3.23%
ROCE(3y)4.43%
ROCE(5y)4.09%
ROICexcg growth 3Y12.87%
ROICexcg growth 5Y-0.44%
ROICexc growth 3Y12.89%
ROICexc growth 5Y-0.48%
OM growth 3Y5.12%
OM growth 5Y-2.76%
PM growth 3Y-13.73%
PM growth 5Y-0.66%
GM growth 3Y0.95%
GM growth 5Y-0.95%
F-Score5
Asset Turnover0.15
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.27 | ||
| Cap/Depr | 205.71% | ||
| Cap/Sales | 67.19% | ||
| Interest Coverage | 3.38 | ||
| Cash Conversion | 85.82% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.03 | ||
| Quick Ratio | 0.03 | ||
| Altman-Z | 1.83 |
F-Score5
WACC7.32%
ROIC/WACC0.47
Cap/Depr(3y)115.1%
Cap/Depr(5y)129.08%
Cap/Sales(3y)36.55%
Cap/Sales(5y)42.13%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)25.1%
EPS 3Y-8.41%
EPS 5Y0.98%
EPS Q2Q%110.64%
EPS Next Y-41.87%
EPS Next 2Y-29.75%
EPS Next 3Y-17.25%
EPS Next 5Y-11.05%
Revenue 1Y (TTM)4.4%
Revenue growth 3Y6.54%
Revenue growth 5Y1.99%
Sales Q2Q%4.72%
Revenue Next Year4.57%
Revenue Next 2Y4.42%
Revenue Next 3Y4.27%
Revenue Next 5Y4.88%
EBIT growth 1Y-3.98%
EBIT growth 3Y12%
EBIT growth 5Y-0.83%
EBIT Next Year103.93%
EBIT Next 3Y30.57%
EBIT Next 5Y18.75%
FCF growth 1Y-139.22%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y6.63%
OCF growth 3Y7.68%
OCF growth 5Y1.55%