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 quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year EQR was profitable.
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
EQR has a Return On Assets of 4.84%. This is amongst the best in the industry. EQR outperforms 85.00% of its industry peers.
With a decent Return On Equity value of 9.01%, EQR is doing good in the industry, outperforming 80.00% of the companies in the same industry.
EQR has a Return On Invested Capital of 3.43%. This is amongst the best in the industry. EQR outperforms 85.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for EQR is in line with the industry average of 2.75%.
| 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 has a Operating Margin of 28.42%. This is in the better half of the industry: EQR outperforms 80.00% of its industry peers.
In the last couple of years the Operating Margin of EQR has declined.
The Gross Margin of EQR (63.22%) is better than 85.00% of its industry peers.
EQR's Gross Margin has been stable in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so EQR is destroying value.
EQR has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for EQR has been increased compared to 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 2.02. 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 2.02 is amongst the best of 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 | 2.02 |
ROIC/WACC0.45
WACC7.58%
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 90.00% of the companies in the same industry.
A Quick Ratio of 0.03 indicates that EQR may have some problems paying 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 nice 8.71% 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 3.81% in the past year.
EQR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.99% yearly.
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
EQR is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -11.05% yearly.
EQR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.15% yearly.
EPS Next Y-49.65%
EPS Next 2Y-29.34%
EPS Next 3Y-17.7%
EPS Next 5Y-11.05%
Revenue Next Year4.94%
Revenue Next 2Y4.65%
Revenue Next 3Y4.48%
Revenue Next 5Y4.15%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
EQR is valuated quite expensively with a Price/Earnings ratio of 26.31.
Based on the Price/Earnings ratio, EQR is valued cheaper than 95.00% of the companies in the same industry.
EQR's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.03.
With a Price/Forward Earnings ratio of 50.76, EQR can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EQR indicates a somewhat cheap valuation: EQR is cheaper than 65.00% of the companies listed 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 21.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.31 | ||
| Fwd PE | 50.76 |
4.2 Price Multiples
70.00% 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 | 18.77 |
4.3 Compensation for Growth
The decent 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 -17.70% in the coming years.
PEG (NY)N/A
PEG (5Y)26.73
EPS Next 2Y-29.34%
EPS Next 3Y-17.7%
5. Dividend
5.1 Amount
EQR has a Yearly Dividend Yield of 3.91%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.45, EQR has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, EQR pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.91% |
5.2 History
The dividend of EQR has a limited annual growth rate of 3.64%.
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)3.64%
Div Incr Years2
Div Non Decr Years13
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-29.34%
EPS Next 3Y-17.7%
68.93
-2.18 (-3.07%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners95.59%
Inst Owner Change-0.44%
Ins Owners0.49%
Ins Owner Change2.17%
Market Cap26.18B
Analysts71.33
Price Target78.59 (14.01%)
Short Float %1.74%
Short Ratio3.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.91% |
Yearly Dividend2.69
Dividend Growth(5Y)3.64%
DP103.08%
Div Incr Years2
Div Non Decr Years13
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)-1.23%
PT rev (3m)-1.52%
EPS NQ rev (1m)-1.44%
EPS NQ rev (3m)-13.91%
EPS NY rev (1m)3.44%
EPS NY rev (3m)-9.89%
Revenue NQ rev (1m)-0.58%
Revenue NQ rev (3m)-0.63%
Revenue NY rev (1m)-0.54%
Revenue NY rev (3m)0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.31 | ||
| Fwd PE | 50.76 | ||
| P/S | 8.7 | ||
| P/FCF | N/A | ||
| P/OCF | 16.59 | ||
| P/B | 2.37 | ||
| P/tB | 2.37 | ||
| EV/EBITDA | 18.77 |
EPS(TTM)2.62
EY3.8%
EPS(NY)1.36
Fwd EY1.97%
FCF(TTM)-1.17
FCFYN/A
OCF(TTM)4.15
OCFY6.03%
SpS7.92
BVpS29.08
TBVpS29.08
PEG (NY)N/A
PEG (5Y)26.73
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 | 2.02 |
F-Score5
WACC7.58%
ROIC/WACC0.45
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-49.65%
EPS Next 2Y-29.34%
EPS Next 3Y-17.7%
EPS Next 5Y-11.05%
Revenue 1Y (TTM)3.81%
Revenue growth 3Y6.54%
Revenue growth 5Y1.99%
Sales Q2Q%4.1%
Revenue Next Year4.94%
Revenue Next 2Y4.65%
Revenue Next 3Y4.48%
Revenue Next 5Y4.15%
EBIT growth 1Y-3.98%
EBIT growth 3Y12%
EBIT growth 5Y-0.83%
EBIT Next Year103.93%
EBIT Next 3Y30.88%
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%