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. While EQR belongs to the best of the industry regarding profitability, there are concerns on its financial health. While showing a medium growth rate, EQR is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year EQR was profitable.
EQR had a positive operating cash flow in the past year.
EQR had positive earnings in each of the past 5 years.
Each year in the past 5 years EQR had a positive operating cash flow.
1.2 Ratios
The Return On Assets of EQR (4.84%) is better than 85.00% of its industry peers.
The Return On Equity of EQR (9.01%) is better than 80.00% of its industry peers.
EQR's Return On Invested Capital of 3.43% is amongst the best of the industry. EQR outperforms 85.00% 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's Profit Margin of 33.06% is amongst the best of the industry. EQR outperforms 90.00% of its industry peers.
In the last couple of years the Profit Margin of EQR has remained more or less at the same level.
EQR's Operating Margin of 28.42% is fine compared to the rest of the industry. EQR outperforms 80.00% of its industry peers.
In the last couple of years the Operating Margin of EQR has declined.
With an excellent Gross Margin value of 63.22%, EQR belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
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
EQR has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
EQR has about the same amout of shares outstanding than it did 1 year ago.
EQR has more shares outstanding than it did 5 years ago.
The debt/assets ratio for EQR is higher compared to a year ago.
2.2 Solvency
EQR has an Altman-Z score of 1.97. 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's Altman-Z score of 1.97 is amongst the best of the industry. EQR outperforms 90.00% of its industry peers.
A Debt/Equity ratio of 0.71 indicates that 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 | 1.97 |
ROIC/WACC0.46
WACC7.51%
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.
EQR has a Quick ratio of 0.03. This is amonst the worse of the industry: EQR underperforms 90.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.03 | ||
| Quick Ratio | 0.03 |
3. Growth
3.1 Past
EQR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.71%, which is quite good.
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.
EQR shows a small growth in Revenue. In the last year, the Revenue has grown by 3.81%.
Measured over the past years, EQR shows a small growth in Revenue. The Revenue has been growing by 1.99% on average per year.
EPS 1Y (TTM)8.71%
EPS 3Y-8.41%
EPS 5Y0.98%
EPS Q2Q%-12.99%
Revenue 1Y (TTM)3.81%
Revenue growth 3Y6.54%
Revenue growth 5Y1.99%
Sales Q2Q%4.1%
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 5.08% on average over the next years.
EPS Next Y-42.07%
EPS Next 2Y-29.46%
EPS Next 3Y-17.36%
EPS Next 5Y-11.05%
Revenue Next Year4.57%
Revenue Next 2Y4.42%
Revenue Next 3Y4.27%
Revenue Next 5Y5.08%
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.
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 26.33 indicates a quite expensive valuation of EQR.
EQR's Price/Earnings ratio is rather cheap when compared to the industry. EQR is cheaper than 95.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.35. EQR is around the same levels.
EQR is valuated quite expensively with a Price/Forward Earnings ratio of 50.98.
Based on the Price/Forward Earnings ratio, EQR is valued a bit cheaper than 65.00% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.19, EQR is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.33 | ||
| Fwd PE | 50.98 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of EQR is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 18.34 |
4.3 Compensation for Growth
EQR has a very decent profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as EQR's earnings are expected to decrease with -17.36% in the coming years.
PEG (NY)N/A
PEG (5Y)26.75
EPS Next 2Y-29.46%
EPS Next 3Y-17.36%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.02%, EQR is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.66, EQR has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.42, EQR pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.02% |
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
EQR pays out 103.08% of its income as dividend. This is not a sustainable payout ratio.
The Dividend Rate of EQR has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP103.08%
EPS Next 2Y-29.46%
EPS Next 3Y-17.36%
68.99
+0.12 (+0.17%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners95.14%
Inst Owner Change-0.4%
Ins Owners0.54%
Ins Owner Change2.17%
Market Cap26.21B
Analysts71.33
Price Target78.92 (14.39%)
Short Float %1.83%
Short Ratio3.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.02% |
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)0.42%
PT rev (3m)-0.7%
EPS NQ rev (1m)1.06%
EPS NQ rev (3m)-1.7%
EPS NY rev (1m)15.06%
EPS NY rev (3m)4.37%
Revenue NQ rev (1m)-0.11%
Revenue NQ rev (3m)-0.91%
Revenue NY rev (1m)-0.35%
Revenue NY rev (3m)-0.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.33 | ||
| Fwd PE | 50.98 | ||
| P/S | 8.71 | ||
| P/FCF | N/A | ||
| P/OCF | 16.61 | ||
| P/B | 2.37 | ||
| P/tB | 2.37 | ||
| EV/EBITDA | 18.34 |
EPS(TTM)2.62
EY3.8%
EPS(NY)1.35
Fwd EY1.96%
FCF(TTM)-1.17
FCFYN/A
OCF(TTM)4.15
OCFY6.02%
SpS7.92
BVpS29.08
TBVpS29.08
PEG (NY)N/A
PEG (5Y)26.75
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 | 1.97 |
F-Score5
WACC7.51%
ROIC/WACC0.46
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)8.71%
EPS 3Y-8.41%
EPS 5Y0.98%
EPS Q2Q%-12.99%
EPS Next Y-42.07%
EPS Next 2Y-29.46%
EPS Next 3Y-17.36%
EPS Next 5Y-11.05%
Revenue 1Y (TTM)3.81%
Revenue growth 3Y6.54%
Revenue growth 5Y1.99%
Sales Q2Q%4.1%
Revenue Next Year4.57%
Revenue Next 2Y4.42%
Revenue Next 3Y4.27%
Revenue Next 5Y5.08%
EBIT growth 1Y-3.98%
EBIT growth 3Y12%
EBIT growth 5Y-0.83%
EBIT Next Year104.14%
EBIT Next 3Y30.63%
EBIT Next 5Y19.07%
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%