ESSEX PROPERTY TRUST INC (ESS) Stock Fundamental Analysis
NYSE:ESS - New York Stock Exchange, Inc. - US2971781057 - REIT - Currency: USD
We assign a fundamental rating of 4 out of 10 to ESS. ESS was compared to 20 industry peers in the Residential REITs industry. ESS has an excellent profitability rating, but there are concerns on its financial health. While showing a medium growth rate, ESS is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year ESS was profitable.
In the past year ESS had a positive cash flow from operations.
Each year in the past 5 years ESS has been profitable.
ESS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 5.74%, ESS belongs to the best of the industry, outperforming 95.00% of the companies in the same industry.
Looking at the Return On Equity, with a value of 13.39%, ESS belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
ESS's Return On Invested Capital of 3.34% is fine compared to the rest of the industry. ESS outperforms 80.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ESS is in line with the industry average of 2.75%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.74% | ||
| ROE | 13.39% | ||
| ROIC | 3.34% |
ROA(3y)4.11%
ROA(5y)4.1%
ROE(3y)9.34%
ROE(5y)9.13%
ROIC(3y)3.38%
ROIC(5y)3.06%
1.3 Margins
ESS has a Profit Margin of 41.79%. This is amongst the best in the industry. ESS outperforms 100.00% of its industry peers.
In the last couple of years the Profit Margin of ESS has grown nicely.
Looking at the Operating Margin, with a value of 29.73%, ESS belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
In the last couple of years the Operating Margin of ESS has declined.
ESS has a better Gross Margin (70.72%) than 95.00% of its industry peers.
ESS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.73% | ||
| PM (TTM) | 41.79% | ||
| GM | 70.72% |
OM growth 3Y3.42%
OM growth 5Y-2.45%
PM growth 3Y7.21%
PM growth 5Y6.79%
GM growth 3Y0.78%
GM growth 5Y-0.57%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ESS is destroying value.
The number of shares outstanding for ESS remains at a similar level compared to 1 year ago.
Compared to 5 years ago, ESS has less shares outstanding
ESS has a worse debt/assets ratio than last year.
2.2 Solvency
ESS has an Altman-Z score of 1.57. This is a bad value and indicates that ESS is not financially healthy and even has some risk of bankruptcy.
ESS has a Altman-Z score of 1.57. This is in the better half of the industry: ESS outperforms 70.00% of its industry peers.
ESS has a Debt/Equity ratio of 1.19. This is a high value indicating a heavy dependency on external financing.
ESS has a Debt to Equity ratio (1.19) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.19 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.57 |
ROIC/WACC0.45
WACC7.38%
2.3 Liquidity
A Current Ratio of 0.52 indicates that ESS may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.52, ESS is in line with its industry, outperforming 55.00% of the companies in the same industry.
ESS has a Quick Ratio of 0.52. This is a bad value and indicates that ESS is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of ESS (0.41) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.52 | ||
| Quick Ratio | 0.41 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 39.62% over the past year.
ESS shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.66% yearly.
ESS shows a small growth in Revenue. In the last year, the Revenue has grown by 6.29%.
The Revenue has been growing slightly by 3.98% on average over the past years.
EPS 1Y (TTM)39.62%
EPS 3Y5.47%
EPS 5Y5.66%
EPS Q2Q%24.51%
Revenue 1Y (TTM)6.29%
Revenue growth 3Y7.2%
Revenue growth 5Y3.98%
Sales Q2Q%7.19%
3.2 Future
The Earnings Per Share is expected to decrease by -2.69% on average over the next years.
ESS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.80% yearly.
EPS Next Y-32.81%
EPS Next 2Y-16.16%
EPS Next 3Y-8.1%
EPS Next 5Y-2.69%
Revenue Next Year5.96%
Revenue Next 2Y4.96%
Revenue Next 3Y4.84%
Revenue Next 5Y3.8%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 31.40, ESS can be considered very expensive at the moment.
Based on the Price/Earnings ratio, ESS is valued cheaper than 85.00% of the companies in the same industry.
ESS is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.92, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 46.73, ESS can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ESS indicates a somewhat cheap valuation: ESS is cheaper than 75.00% of the companies listed in the same industry.
ESS is valuated expensively when we compare the Price/Forward Earnings ratio to 21.65, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.4 | ||
| Fwd PE | 46.73 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ESS is valued expensively inside the industry as 80.00% of the companies are valued cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 21.95 |
4.3 Compensation for Growth
ESS has an outstanding profitability rating, which may justify a higher PE ratio.
ESS's earnings are expected to decrease with -8.10% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)5.55
EPS Next 2Y-16.16%
EPS Next 3Y-8.1%
5. Dividend
5.1 Amount
ESS has a Yearly Dividend Yield of 3.73%.
ESS's Dividend Yield is slightly below the industry average, which is at 4.58.
Compared to an average S&P500 Dividend Yield of 2.51, ESS pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.73% |
5.2 History
The dividend of ESS has a limited annual growth rate of 4.65%.
ESS has paid a dividend for at least 10 years, which is a reliable track record.
ESS has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.65%
Div Incr Years29
Div Non Decr Years29
5.3 Sustainability
ESS pays out 83.67% of its income as dividend. This is not a sustainable payout ratio.
ESS's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP83.67%
EPS Next 2Y-16.16%
EPS Next 3Y-8.1%
276.6
-0.49 (-0.18%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners96.96%
Inst Owner Change0.71%
Ins Owners1.11%
Ins Owner Change2%
Market Cap17.79B
Analysts66.45
Price Target318.15 (15.02%)
Short Float %1.61%
Short Ratio2.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.73% |
Yearly Dividend9.66
Dividend Growth(5Y)4.65%
DP83.67%
Div Incr Years29
Div Non Decr Years29
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)11.93%
Min EPS beat(2)-9.12%
Max EPS beat(2)32.98%
EPS beat(4)3
Avg EPS beat(4)63.81%
Min EPS beat(4)-9.12%
Max EPS beat(4)225.19%
EPS beat(8)5
Avg EPS beat(8)39.2%
EPS beat(12)7
Avg EPS beat(12)30.92%
EPS beat(16)11
Avg EPS beat(16)45.41%
Revenue beat(2)0
Avg Revenue beat(2)-0.56%
Min Revenue beat(2)-0.85%
Max Revenue beat(2)-0.27%
Revenue beat(4)2
Avg Revenue beat(4)0.15%
Min Revenue beat(4)-0.85%
Max Revenue beat(4)1.43%
Revenue beat(8)2
Avg Revenue beat(8)-0.44%
Revenue beat(12)5
Avg Revenue beat(12)-0.12%
Revenue beat(16)6
Avg Revenue beat(16)-0.14%
PT rev (1m)0.31%
PT rev (3m)1.7%
EPS NQ rev (1m)-3.04%
EPS NQ rev (3m)-0.63%
EPS NY rev (1m)-2.07%
EPS NY rev (3m)-2.26%
Revenue NQ rev (1m)0.19%
Revenue NQ rev (3m)1.87%
Revenue NY rev (1m)0.16%
Revenue NY rev (3m)0.86%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.4 | ||
| Fwd PE | 46.73 | ||
| P/S | 10.03 | ||
| P/FCF | N/A | ||
| P/OCF | 16.66 | ||
| P/B | 3.21 | ||
| P/tB | 3.21 | ||
| EV/EBITDA | 21.95 |
EPS(TTM)8.81
EY3.19%
EPS(NY)5.92
Fwd EY2.14%
FCF(TTM)-1.27
FCFYN/A
OCF(TTM)16.61
OCFY6%
SpS27.58
BVpS86.07
TBVpS86.07
PEG (NY)N/A
PEG (5Y)5.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.74% | ||
| ROE | 13.39% | ||
| ROCE | 4.23% | ||
| ROIC | 3.34% | ||
| ROICexc | 3.36% | ||
| ROICexgc | 3.36% | ||
| OM | 29.73% | ||
| PM (TTM) | 41.79% | ||
| GM | 70.72% | ||
| FCFM | N/A |
ROA(3y)4.11%
ROA(5y)4.1%
ROE(3y)9.34%
ROE(5y)9.13%
ROIC(3y)3.38%
ROIC(5y)3.06%
ROICexc(3y)3.43%
ROICexc(5y)3.09%
ROICexgc(3y)3.43%
ROICexgc(5y)3.09%
ROCE(3y)4.28%
ROCE(5y)3.87%
ROICexcg growth 3Y11.24%
ROICexcg growth 5Y1.13%
ROICexc growth 3Y11.22%
ROICexc growth 5Y1.11%
OM growth 3Y3.42%
OM growth 5Y-2.45%
PM growth 3Y7.21%
PM growth 5Y6.79%
GM growth 3Y0.78%
GM growth 5Y-0.57%
F-Score5
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.19 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.96 | ||
| Cap/Depr | 198.25% | ||
| Cap/Sales | 64.82% | ||
| Interest Coverage | 2.36 | ||
| Cash Conversion | 96.43% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.52 | ||
| Quick Ratio | 0.41 | ||
| Altman-Z | 1.57 |
F-Score5
WACC7.38%
ROIC/WACC0.45
Cap/Depr(3y)100.16%
Cap/Depr(5y)101.9%
Cap/Sales(3y)32.94%
Cap/Sales(5y)34.6%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)39.62%
EPS 3Y5.47%
EPS 5Y5.66%
EPS Q2Q%24.51%
EPS Next Y-32.81%
EPS Next 2Y-16.16%
EPS Next 3Y-8.1%
EPS Next 5Y-2.69%
Revenue 1Y (TTM)6.29%
Revenue growth 3Y7.2%
Revenue growth 5Y3.98%
Sales Q2Q%7.19%
Revenue Next Year5.96%
Revenue Next 2Y4.96%
Revenue Next 3Y4.84%
Revenue Next 5Y3.8%
EBIT growth 1Y0.28%
EBIT growth 3Y10.86%
EBIT growth 5Y1.43%
EBIT Next Year133.07%
EBIT Next 3Y35.97%
EBIT Next 5Y26.93%
FCF growth 1Y-111.17%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y9%
OCF growth 3Y5.68%
OCF growth 5Y3.05%