ESSEX PROPERTY TRUST INC (ESS) Stock Fundamental Analysis
NYSE:ESS - New York Stock Exchange, Inc. - US2971781057 - REIT - Currency: USD
ESS gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 20 industry peers in the Residential REITs industry. ESS has an excellent profitability rating, but there are concerns on its financial health. ESS does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
ESS had positive earnings in the past year.
ESS had a positive operating cash flow in the past year.
In the past 5 years ESS has always been profitable.
ESS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ESS has a Return On Assets of 5.10%. This is amongst the best in the industry. ESS outperforms 90.00% of its industry peers.
ESS has a better Return On Equity (12.06%) than 95.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.36%, ESS is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
ESS had an Average Return On Invested Capital over the past 3 years of 3.38%. This is in line with the industry average of 2.62%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.1% | ||
| ROE | 12.06% | ||
| ROIC | 3.36% |
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
Looking at the Profit Margin, with a value of 37.08%, ESS belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
ESS's Profit Margin has improved in the last couple of years.
The Operating Margin of ESS (29.84%) is better than 90.00% of its industry peers.
In the last couple of years the Operating Margin of ESS has declined.
With an excellent Gross Margin value of 70.63%, ESS belongs to the best of the industry, outperforming 95.00% of the companies in the same industry.
In the last couple of years the Gross Margin of ESS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.84% | ||
| PM (TTM) | 37.08% | ||
| GM | 70.63% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ESS is destroying value.
ESS has about the same amout of shares outstanding than it did 1 year ago.
ESS has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ESS has a worse debt to assets ratio.
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.
With a decent Altman-Z score value of 1.57, ESS is doing good in the industry, outperforming 75.00% of the companies in the same industry.
ESS has a Debt/Equity ratio of 1.22. This is a high value indicating a heavy dependency on external financing.
ESS's Debt to Equity ratio of 1.22 is in line compared to the rest of the industry. ESS outperforms 45.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.57 |
ROIC/WACC0.45
WACC7.45%
2.3 Liquidity
A Current Ratio of 0.64 indicates that ESS may have some problems paying its short term obligations.
ESS has a Current ratio of 0.64. This is in the better half of the industry: ESS outperforms 65.00% of its industry peers.
ESS has a Quick Ratio of 0.64. This is a bad value and indicates that ESS is not financially healthy enough and could expect problems in meeting its short term obligations.
ESS has a Quick ratio of 0.44. This is comparable to the rest of the industry: ESS outperforms 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.64 | ||
| Quick Ratio | 0.44 |
3. Growth
3.1 Past
The earnings per share for ESS have decreased by -5.62% in the last year.
Measured over the past 5 years, ESS shows a small growth in Earnings Per Share. The EPS has been growing by 5.66% on average per year.
The Revenue has been growing slightly by 7.61% in the past year.
Measured over the past years, ESS shows a small growth in Revenue. The Revenue has been growing by 3.98% on average per year.
EPS 1Y (TTM)-5.62%
EPS 3Y5.47%
EPS 5Y5.66%
EPS Q2Q%-25.65%
Revenue 1Y (TTM)7.61%
Revenue growth 3Y7.2%
Revenue growth 5Y3.98%
Sales Q2Q%8.24%
3.2 Future
The Earnings Per Share is expected to decrease by -4.22% 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 3.99% yearly.
EPS Next Y-13.35%
EPS Next 2Y-17.29%
EPS Next 3Y-9.1%
EPS Next 5Y-4.22%
Revenue Next Year6.46%
Revenue Next 2Y5.12%
Revenue Next 3Y4.62%
Revenue Next 5Y3.99%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 37.65, which means the current valuation is very expensive for ESS.
Compared to the rest of the industry, the Price/Earnings ratio of ESS indicates a somewhat cheap valuation: ESS is cheaper than 75.00% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of ESS to the average of the S&P500 Index (27.91), we can say ESS is valued slightly more expensively.
A Price/Forward Earnings ratio of 48.23 indicates a quite expensive valuation of ESS.
Based on the Price/Forward Earnings ratio, ESS is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
ESS is valuated rather expensively when we compare the Price/Forward Earnings ratio to 37.11, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.65 | ||
| Fwd PE | 48.23 |
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 | 22.01 |
4.3 Compensation for Growth
The excellent profitability rating of ESS may justify a higher PE ratio.
ESS's earnings are expected to decrease with -9.10% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)6.65
EPS Next 2Y-17.29%
EPS Next 3Y-9.1%
5. Dividend
5.1 Amount
ESS has a Yearly Dividend Yield of 3.58%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.67, ESS is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.32, ESS pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.58% |
5.2 History
The dividend of ESS has a limited annual growth rate of 4.65%.
ESS has been paying a dividend for at least 10 years, so it has a reliable track record.
ESS has decreased its dividend recently.
Dividend Growth(5Y)4.65%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
93.74% of the earnings are spent on dividend by ESS. This is not a sustainable payout ratio.
The Dividend Rate of ESS has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP93.74%
EPS Next 2Y-17.29%
EPS Next 3Y-9.1%
290.67
+7.51 (+2.65%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners100.44%
Inst Owner Change4.05%
Ins Owners1.14%
Ins Owner Change5.41%
Market Cap18.72B
Analysts67.74
Price Target316.69 (8.95%)
Short Float %2.43%
Short Ratio3.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.58% |
Yearly Dividend9.66
Dividend Growth(5Y)4.65%
DP93.74%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)57%
Min EPS beat(2)-9.12%
Max EPS beat(2)123.13%
EPS beat(4)3
Avg EPS beat(4)38.29%
Min EPS beat(4)-9.12%
Max EPS beat(4)123.13%
EPS beat(8)5
Avg EPS beat(8)44.22%
EPS beat(12)8
Avg EPS beat(12)41.86%
EPS beat(16)11
Avg EPS beat(16)42.7%
Revenue beat(2)0
Avg Revenue beat(2)-0.62%
Min Revenue beat(2)-0.85%
Max Revenue beat(2)-0.4%
Revenue beat(4)1
Avg Revenue beat(4)-0.02%
Min Revenue beat(4)-0.85%
Max Revenue beat(4)1.43%
Revenue beat(8)2
Avg Revenue beat(8)-0.31%
Revenue beat(12)4
Avg Revenue beat(12)-0.24%
Revenue beat(16)6
Avg Revenue beat(16)-0.09%
PT rev (1m)0.18%
PT rev (3m)0.18%
EPS NQ rev (1m)0.33%
EPS NQ rev (3m)-0.01%
EPS NY rev (1m)14.7%
EPS NY rev (3m)28.97%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)0.75%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)0.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.65 | ||
| Fwd PE | 48.23 | ||
| P/S | 10.33 | ||
| P/FCF | N/A | ||
| P/OCF | 18.09 | ||
| P/B | 3.36 | ||
| P/tB | 3.36 | ||
| EV/EBITDA | 22.01 |
EPS(TTM)7.72
EY2.66%
EPS(NY)6.03
Fwd EY2.07%
FCF(TTM)-1.78
FCFYN/A
OCF(TTM)16.07
OCFY5.53%
SpS28.14
BVpS86.5
TBVpS86.5
PEG (NY)N/A
PEG (5Y)6.65
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.1% | ||
| ROE | 12.06% | ||
| ROCE | 4.26% | ||
| ROIC | 3.36% | ||
| ROICexc | 3.39% | ||
| ROICexgc | 3.39% | ||
| OM | 29.84% | ||
| PM (TTM) | 37.08% | ||
| GM | 70.63% | ||
| 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 | 1.22 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 6 | ||
| Cap/Depr | 194.3% | ||
| Cap/Sales | 63.42% | ||
| Interest Coverage | 2.39 | ||
| Cash Conversion | 91.39% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.64 | ||
| Quick Ratio | 0.44 | ||
| Altman-Z | 1.57 |
F-Score5
WACC7.45%
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)-5.62%
EPS 3Y5.47%
EPS 5Y5.66%
EPS Q2Q%-25.65%
EPS Next Y-13.35%
EPS Next 2Y-17.29%
EPS Next 3Y-9.1%
EPS Next 5Y-4.22%
Revenue 1Y (TTM)7.61%
Revenue growth 3Y7.2%
Revenue growth 5Y3.98%
Sales Q2Q%8.24%
Revenue Next Year6.46%
Revenue Next 2Y5.12%
Revenue Next 3Y4.62%
Revenue Next 5Y3.99%
EBIT growth 1Y1.99%
EBIT growth 3Y10.86%
EBIT growth 5Y1.43%
EBIT Next Year136.36%
EBIT Next 3Y35.97%
EBIT Next 5Y26.8%
FCF growth 1Y-118.13%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y10.39%
OCF growth 3Y5.68%
OCF growth 5Y3.05%