EQUITY RESIDENTIAL (EQR)
US29476L1070 - REIT
EQR gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 20 industry peers in the Residential REITs industry. EQR scores excellent on profitability, but there are concerns on its financial health. EQR has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
EQR had positive earnings in the past year.
EQR had a positive operating cash flow in the past year.
Each year in the past 5 years EQR has been profitable.
Each year in the past 5 years EQR had a positive operating cash flow.
1.2 Ratios
The Return On Assets of EQR (4.60%) is better than 80.00% of its industry peers.
EQR has a better Return On Equity (8.27%) than 70.00% of its industry peers.
With an excellent Return On Invested Capital value of 3.69%, EQR belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for EQR is in line with the industry average of 2.59%.
The last Return On Invested Capital (3.69%) for EQR is above the 3 year average (3.09%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.6% | ||
| ROE | 8.27% | ||
| ROIC | 3.69% |
ROA(3y)4.75%
ROA(5y)4.66%
ROE(3y)8.86%
ROE(5y)8.92%
ROIC(3y)3.09%
ROIC(5y)3.19%
1.3 Margins
EQR's Profit Margin of 31.55% is amongst the best of the industry. EQR outperforms 95.00% of its industry peers.
EQR's Profit Margin has improved in the last couple of years.
EQR has a Operating Margin of 30.73%. This is amongst the best in the industry. EQR outperforms 85.00% of its industry peers.
In the last couple of years the Operating Margin of EQR has declined.
Looking at the Gross Margin, with a value of 63.80%, 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 Gross Margin of EQR has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.73% | ||
| PM (TTM) | 31.55% | ||
| GM | 63.8% |
OM growth 3Y-0.02%
OM growth 5Y-1.71%
PM growth 3Y-6.48%
PM growth 5Y2.67%
GM growth 3Y-0.4%
GM growth 5Y-0.7%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), EQR is destroying value.
Compared to 1 year ago, EQR has more shares outstanding
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 2.12. 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 2.12 is amongst the best of the industry. EQR outperforms 90.00% of its industry peers.
EQR has a debt to FCF ratio of 8.91. This is a slightly negative value and a sign of low solvency as EQR would need 8.91 years to pay back of all of its debts.
The Debt to FCF ratio of EQR (8.91) is better than 100.00% of its industry peers.
A Debt/Equity ratio of 0.65 indicates that EQR is somewhat dependend on debt financing.
EQR has a Debt to Equity ratio of 0.65. This is amongst the best in the industry. EQR outperforms 90.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 8.91 | ||
| Altman-Z | 2.12 |
ROIC/WACC0.49
WACC7.54%
2.3 Liquidity
A Current Ratio of 0.04 indicates that EQR may have some problems paying its short term obligations.
The Current ratio of EQR (0.04) is worse than 90.00% of its industry peers.
EQR has a Quick Ratio of 0.04. 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 worse Quick ratio (0.04) than 90.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.04 | ||
| Quick Ratio | 0.04 |
3. Growth
3.1 Past
EQR shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -0.82%.
Measured over the past 5 years, EQR shows a small growth in Earnings Per Share. The EPS has been growing by 4.21% on average per year.
Looking at the last year, EQR shows a small growth in Revenue. The Revenue has grown by 4.05% in the last year.
The Revenue has been growing slightly by 2.20% on average over the past years.
EPS 1Y (TTM)-0.82%
EPS 3Y-3.52%
EPS 5Y4.21%
EPS Q2Q%37.5%
Revenue 1Y (TTM)4.05%
Revenue growth 3Y3.77%
Revenue growth 5Y2.2%
Sales Q2Q%3.65%
3.2 Future
Based on estimates for the next years, EQR will show a decrease in Earnings Per Share. The EPS will decrease by -2.39% on average per year.
EQR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.37% yearly.
EPS Next Y-12.08%
EPS Next 2Y-12.54%
EPS Next 3Y-5.73%
EPS Next 5Y-2.39%
Revenue Next Year2.89%
Revenue Next 2Y3.21%
Revenue Next 3Y3.31%
Revenue Next 5Y3.37%
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
The Price/Earnings ratio is 29.37, which means the current valuation is very expensive for EQR.
95.00% of the companies in the same industry are more expensive than EQR, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 24.41, EQR is valued a bit more expensive.
Based on the Price/Forward Earnings ratio of 42.05, the valuation of EQR can be described as expensive.
80.00% of the companies in the same industry are more expensive than EQR, based on the Price/Forward Earnings ratio.
EQR is valuated expensively when we compare the Price/Forward Earnings ratio to 20.59, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.37 | ||
| Fwd PE | 42.05 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EQR is valued a bit cheaper than the industry average as 70.00% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, EQR is valued cheaply inside the industry as 90.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.15 | ||
| EV/EBITDA | 18.6 |
4.3 Compensation for Growth
The excellent profitability rating of EQR may justify a higher PE ratio.
A cheap valuation may be justified as EQR's earnings are expected to decrease with -5.73% in the coming years.
PEG (NY)N/A
PEG (5Y)6.97
EPS Next 2Y-12.54%
EPS Next 3Y-5.73%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.85%, EQR has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.10, EQR has a dividend in line with its industry peers.
EQR's Dividend Yield is rather good when compared to the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.85% |
5.2 History
The dividend of EQR has a limited annual growth rate of 4.21%.
EQR has paid a dividend for at least 10 years, which is a reliable track record.
EQR has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)4.21%
Div Incr Years2
Div Non Decr Years13
5.3 Sustainability
110.12% of the earnings are spent on dividend by EQR. 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.
DP110.12%
EPS Next 2Y-12.54%
EPS Next 3Y-5.73%
EQUITY RESIDENTIAL
NYSE:EQR (7/26/2024, 7:27:20 PM)
After market: 70.77 0 (0%)70.77
+1.25 (+1.8%)
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 Cap26.82B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.85% |
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)
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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 | 29.37 | ||
| Fwd PE | 42.05 | ||
| 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)6.97
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.6% | ||
| ROE | 8.27% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 30.73% | ||
| PM (TTM) | 31.55% | ||
| GM | 63.8% | ||
| 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 Turnover0.15
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.04 | ||
| Quick Ratio | 0.04 | ||
| 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)
High Growth Momentum
Growth
EPS 1Y (TTM)-0.82%
EPS 3Y-3.52%
EPS 5Y
EPS Q2Q%
EPS Next Y-12.08%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)4.05%
Revenue growth 3Y3.77%
Revenue growth 5Y
Sales 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