EQUITY RESIDENTIAL (EQR)

US29476L1070 - REIT

60.71  -0.52 (-0.85%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to EQR. EQR was compared to 21 industry peers in the Residential REITs industry. EQR has an excellent profitability rating, but there are some minor concerns on its financial health. EQR has a valuation in line with the averages, but it does not seem to be growing.



7

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.
EQR had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

EQR has a Return On Assets of 3.38%. This is in the better half of the industry: EQR outperforms 66.67% of its industry peers.
EQR's Return On Equity of 6.14% is fine compared to the rest of the industry. EQR outperforms 66.67% of its industry peers.
The Return On Invested Capital of EQR (3.62%) is better than 90.48% of its industry peers.
EQR had an Average Return On Invested Capital over the past 3 years of 3.09%. This is in line with the industry average of 2.44%.
The last Return On Invested Capital (3.62%) for EQR is above the 3 year average (3.09%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 3.38%
ROE 6.14%
ROIC 3.62%
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

The Profit Margin of EQR (23.88%) is better than 71.43% of its industry peers.
EQR's Profit Margin has improved in the last couple of years.
EQR has a better Operating Margin (31.04%) than 85.71% 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 63.96%, EQR is in the better half of the industry, outperforming 76.19% 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 RankSector Rank
OM 31.04%
PM (TTM) 23.88%
GM 63.96%
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%

4

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.
EQR has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 1.85 indicates that EQR 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 1.85, EQR belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
The Debt to FCF ratio of EQR is 9.37, which is on the high side as it means it would take EQR, 9.37 years of fcf income to pay off all of its debts.
EQR has a Debt to FCF ratio of 9.37. This is amongst the best in the industry. EQR outperforms 95.24% of its industry peers.
EQR has a Debt/Equity ratio of 0.68. This is a neutral value indicating EQR is somewhat dependend on debt financing.
EQR has a better Debt to Equity ratio (0.68) than 90.48% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.68
Debt/FCF 9.37
Altman-Z 1.85
ROIC/WACC0.5
WACC7.3%

2.3 Liquidity

EQR has a Current 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 Current ratio, with a value of 0.03, EQR is doing worse than 90.48% of the companies in the same industry.
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.
The Quick ratio of EQR (0.03) is worse than 90.48% of its industry peers.
Industry RankSector Rank
Current Ratio 0.03
Quick Ratio 0.03

3

3. Growth

3.1 Past

The earnings per share for EQR have decreased strongly by -40.79% in the last year.
EQR shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.86% yearly.
EQR shows a small growth in Revenue. In the last year, the Revenue has grown by 6.18%.
Measured over the past years, EQR shows a small growth in Revenue. The Revenue has been growing by 2.20% on average per year.
EPS 1Y (TTM)-40.79%
EPS 3Y-0.96%
EPS 5Y5.86%
EPS growth Q2Q-47.67%
Revenue 1Y (TTM)6.18%
Revenue growth 3Y3.77%
Revenue growth 5Y2.2%
Revenue growth Q2Q4.17%

3.2 Future

EQR is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.20% yearly.
EQR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.50% yearly.
EPS Next Y-33.76%
EPS Next 2Y-14.86%
EPS Next 3Y-4.23%
EPS Next 5Y0.2%
Revenue Next Year2.96%
Revenue Next 2Y3.54%
Revenue Next 3Y5.31%
Revenue Next 5Y5.5%

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

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 33.73 indicates a quite expensive valuation of EQR.
Based on the Price/Earnings ratio, EQR is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.00. EQR is valued slightly more expensive when compared to this.
A Price/Forward Earnings ratio of 38.51 indicates a quite expensive valuation of EQR.
EQR's Price/Forward Earnings ratio is rather cheap when compared to the industry. EQR is cheaper than 80.95% of the companies in the same industry.
EQR's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.38.
Industry RankSector Rank
PE 33.73
Fwd PE 38.51

4.2 Price Multiples

66.67% of the companies in the same industry are more expensive than EQR, based on the Enterprise Value to EBITDA ratio.
76.19% of the companies in the same industry are more expensive than EQR, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 28.84
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 -4.23% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)5.75
EPS Next 2Y-14.86%
EPS Next 3Y-4.23%

5

5. Dividend

5.1 Amount

EQR has a Yearly Dividend Yield of 4.39%, which is a nice return.
EQR's Dividend Yield is comparable with the industry average which is at 4.57.
Compared to an average S&P500 Dividend Yield of 2.48, EQR pays a better dividend.
Industry RankSector Rank
Dividend Yield 4.39%

5.2 History

The dividend of EQR has a limited annual growth rate of 4.14%.
EQR has been paying a dividend for at least 10 years, so it has a reliable track record.
EQR has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)4.14%
Div Incr Years1
Div Non Decr Years5

5.3 Sustainability

143.60% of the earnings are spent on dividend by EQR. This is not a sustainable payout ratio.
The dividend of EQR is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP143.6%
EPS Next 2Y-14.86%
EPS Next 3Y-4.23%

EQUITY RESIDENTIAL

NYSE:EQR (2/22/2024, 11:59:00 AM)

60.71

-0.52 (-0.85%)

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 Cap23.03B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 4.39%
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)
Max EPS beat(4)
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 RankSector Rank
PE 33.73
Fwd PE 38.51
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)5.75
Profitability
Industry RankSector Rank
ROA 3.38%
ROE 6.14%
ROCE
ROIC
ROICexc
ROICexgc
OM 31.04%
PM (TTM) 23.88%
GM 63.96%
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 Turnover0.14
Health
Industry RankSector Rank
Debt/Equity 0.68
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 0.03
Quick Ratio 0.03
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)-40.79%
EPS 3Y-0.96%
EPS 5Y
EPS growth Q2Q
EPS Next Y-33.76%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)6.18%
Revenue growth 3Y3.77%
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