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AVALONBAY COMMUNITIES INC (AVB) Stock Fundamental Analysis

NYSE:AVB - New York Stock Exchange, Inc. - US0534841012 - REIT - Currency: USD

218.92  -0.46 (-0.21%)

After market: 218.92 0 (0%)

Fundamental Rating

4

Overall AVB gets a fundamental rating of 4 out of 10. We evaluated AVB against 20 industry peers in the Residential REITs industry. AVB scores excellent on profitability, but there are some minor concerns on its financial health. AVB is valued expensive and it does not seem to be growing.


Dividend Valuation Growth Profitability Health

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7

1. Profitability

1.1 Basic Checks

In the past year AVB was profitable.
In the past year AVB had a positive cash flow from operations.
Of the past 5 years AVB 4 years were profitable.
AVB had a positive operating cash flow in 4 of the past 5 years.
AVB Yearly Net Income VS EBIT VS OCF VS FCFAVB Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 500M -500M 1B 1.5B

1.2 Ratios

Looking at the Return On Assets, with a value of 4.88%, AVB belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
Looking at the Return On Equity, with a value of 8.75%, AVB is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
AVB has a better Return On Invested Capital (3.57%) than 90.00% of its industry peers.
AVB had an Average Return On Invested Capital over the past 3 years of 3.08%. This is in line with the industry average of 2.61%.
The last Return On Invested Capital (3.57%) for AVB is above the 3 year average (3.08%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 4.88%
ROE 8.75%
ROIC 3.57%
ROA(3y)5.02%
ROA(5y)4.69%
ROE(3y)9.04%
ROE(5y)8.39%
ROIC(3y)3.08%
ROIC(5y)3.18%
AVB Yearly ROA, ROE, ROICAVB Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2 4 6 8 10

1.3 Margins

Looking at the Profit Margin, with a value of 36.13%, AVB belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
AVB's Profit Margin has declined in the last couple of years.
AVB has a better Operating Margin (31.82%) than 100.00% of its industry peers.
AVB's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 63.79%, AVB belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
AVB's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 31.82%
PM (TTM) 36.13%
GM 63.79%
OM growth 3Y1.22%
OM growth 5Y-2.41%
PM growth 3Y-2.26%
PM growth 5Y-4.66%
GM growth 3Y0.03%
GM growth 5Y-0.6%
AVB Yearly Profit, Operating, Gross MarginsAVB Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 20 40 60

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4

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AVB is destroying value.
There is no outstanding debt for AVB. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
AVB Yearly Shares OutstandingAVB Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M
AVB Yearly Total Debt VS Total AssetsAVB Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B 15B 20B

2.2 Solvency

AVB has an Altman-Z score of 2.30. This is not the best score and indicates that AVB is in the grey zone with still only limited risk for bankruptcy at the moment.
AVB has a better Altman-Z score (2.30) than 100.00% of its industry peers.
AVB has a debt to FCF ratio of 77.10. This is a negative value and a sign of low solvency as AVB would need 77.10 years to pay back of all of its debts.
With a Debt to FCF ratio value of 77.10, AVB is not doing good in the industry: 65.00% of the companies in the same industry are doing better.
AVB has a Debt/Equity ratio of 0.71. This is a neutral value indicating AVB is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.71, AVB belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.71
Debt/FCF 77.1
Altman-Z 2.3
ROIC/WACC0.47
WACC7.55%
AVB Yearly LT Debt VS Equity VS FCFAVB Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2B 4B 6B 8B 10B

2.3 Liquidity

A Current Ratio of 1.03 indicates that AVB should not have too much problems paying its short term obligations.
AVB's Current ratio of 1.03 is fine compared to the rest of the industry. AVB outperforms 80.00% of its industry peers.
A Quick Ratio of 1.03 indicates that AVB should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.03, AVB is doing good in the industry, outperforming 80.00% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.03
Quick Ratio 1.03
AVB Yearly Current Assets VS Current LiabilitesAVB Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M

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2

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 44.85% over the past year.
The Earnings Per Share has been growing slightly by 6.12% on average over the past years.
EPS 1Y (TTM)44.85%
EPS 3Y17.41%
EPS 5Y6.12%
EPS Q2Q%16.47%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%16.12%

3.2 Future

AVB is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -3.19% yearly.
Based on estimates for the next years, AVB will show a small growth in Revenue. The Revenue will grow by 6.76% on average per year.
EPS Next Y-27.41%
EPS Next 2Y-10.69%
EPS Next 3Y-5.83%
EPS Next 5Y-3.19%
Revenue Next Year4.64%
Revenue Next 2Y5.08%
Revenue Next 3Y6.16%
Revenue Next 5Y6.76%

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.
AVB Yearly Revenue VS EstimatesAVB Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 1B 2B 3B 4B
AVB Yearly EPS VS EstimatesAVB Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2 4 6

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2

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 28.84, which means the current valuation is very expensive for AVB.
85.00% of the companies in the same industry are more expensive than AVB, based on the Price/Earnings ratio.
AVB's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 29.63.
AVB is valuated quite expensively with a Price/Forward Earnings ratio of 39.73.
85.00% of the companies in the same industry are more expensive than AVB, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of AVB to the average of the S&P500 Index (22.68), we can say AVB is valued expensively.
Industry RankSector Rank
PE 28.84
Fwd PE 39.73
AVB Price Earnings VS Forward Price EarningsAVB Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

70.00% of the companies in the same industry are cheaper than AVB, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, AVB is valued a bit more expensive than the industry average as 65.00% of the companies are valued more cheaply.
Industry RankSector Rank
P/FCF 285.96
EV/EBITDA 22.18
AVB Per share dataAVB EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 20 40 60 80

4.3 Compensation for Growth

The decent profitability rating of AVB may justify a higher PE ratio.
AVB's earnings are expected to decrease with -5.83% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)4.71
EPS Next 2Y-10.69%
EPS Next 3Y-5.83%

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4

5. Dividend

5.1 Amount

AVB has a Yearly Dividend Yield of 3.19%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.25, AVB is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.27, AVB pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 3.19%

5.2 History

The dividend of AVB has a limited annual growth rate of 2.39%.
AVB has been paying a dividend for at least 10 years, so it has a reliable track record.
AVB has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)2.39%
Div Incr Years2
Div Non Decr Years26
AVB Yearly Dividends per shareAVB Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2 4 6

5.3 Sustainability

AVB pays out 91.77% of its income as dividend. This is not a sustainable payout ratio.
The Dividend Rate of AVB has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP91.77%
EPS Next 2Y-10.69%
EPS Next 3Y-5.83%
AVB Yearly Income VS Free CF VS DividendAVB Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 500M -500M 1B
AVB Dividend Payout.AVB Dividend Payout, showing the Payout Ratio.AVB Dividend Payout.PayoutRetained Earnings

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AVALONBAY COMMUNITIES INC

NYSE:AVB (2/21/2025, 8:04:00 PM)

After market: 218.92 0 (0%)

218.92

-0.46 (-0.21%)

Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)02-05 2025-02-05/amc
Earnings (Next)04-23 2025-04-23/amc
Inst Owners96.5%
Inst Owner Change-87.16%
Ins Owners0.33%
Ins Owner Change-5.31%
Market Cap31.14B
Analysts72.86
Price Target244.19 (11.54%)
Short Float %2.14%
Short Ratio4.89
Dividend
Industry RankSector Rank
Dividend Yield 3.19%
Yearly Dividend6.54
Dividend Growth(5Y)2.39%
DP91.77%
Div Incr Years2
Div Non Decr Years26
Ex-Date03-31 2025-03-31 (1.75)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)59.21%
Min EPS beat(2)40.09%
Max EPS beat(2)78.32%
EPS beat(4)4
Avg EPS beat(4)36.84%
Min EPS beat(4)3.33%
Max EPS beat(4)78.32%
EPS beat(8)5
Avg EPS beat(8)16.24%
EPS beat(12)8
Avg EPS beat(12)37.07%
EPS beat(16)11
Avg EPS beat(16)40.08%
Revenue beat(2)0
Avg Revenue beat(2)-0.49%
Min Revenue beat(2)-0.85%
Max Revenue beat(2)-0.13%
Revenue beat(4)0
Avg Revenue beat(4)-2.83%
Min Revenue beat(4)-10.18%
Max Revenue beat(4)-0.13%
Revenue beat(8)0
Avg Revenue beat(8)-3.62%
Revenue beat(12)1
Avg Revenue beat(12)-2.45%
Revenue beat(16)3
Avg Revenue beat(16)-1.86%
PT rev (1m)-0.6%
PT rev (3m)0.64%
EPS NQ rev (1m)3.54%
EPS NQ rev (3m)3.54%
EPS NY rev (1m)9.82%
EPS NY rev (3m)19.28%
Revenue NQ rev (1m)-0.17%
Revenue NQ rev (3m)-0.17%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.03%
Valuation
Industry RankSector Rank
PE 28.84
Fwd PE 39.73
P/S 10.82
P/FCF 285.96
P/OCF 19.16
P/B 2.62
P/tB 2.62
EV/EBITDA 22.18
EPS(TTM)7.59
EY3.47%
EPS(NY)5.51
Fwd EY2.52%
FCF(TTM)0.77
FCFY0.35%
OCF(TTM)11.43
OCFY5.22%
SpS20.23
BVpS83.56
TBVpS83.56
PEG (NY)N/A
PEG (5Y)4.71
Profitability
Industry RankSector Rank
ROA 4.88%
ROE 8.75%
ROCE 4.52%
ROIC 3.57%
ROICexc 3.67%
ROICexgc 3.67%
OM 31.82%
PM (TTM) 36.13%
GM 63.79%
FCFM 3.78%
ROA(3y)5.02%
ROA(5y)4.69%
ROE(3y)9.04%
ROE(5y)8.39%
ROIC(3y)3.08%
ROIC(5y)3.18%
ROICexc(3y)3.16%
ROICexc(5y)3.24%
ROICexgc(3y)3.16%
ROICexgc(5y)3.24%
ROCE(3y)3.9%
ROCE(5y)4.03%
ROICexcg growth 3Y5.19%
ROICexcg growth 5Y-0.59%
ROICexc growth 3Y5.25%
ROICexc growth 5Y-0.55%
OM growth 3Y1.22%
OM growth 5Y-2.41%
PM growth 3Y-2.26%
PM growth 5Y-4.66%
GM growth 3Y0.03%
GM growth 5Y-0.6%
F-Score6
Asset Turnover0.14
Health
Industry RankSector Rank
Debt/Equity 0.71
Debt/FCF 77.1
Debt/EBITDA 4.78
Cap/Depr 180.1%
Cap/Sales 52.69%
Interest Coverage 4.76
Cash Conversion 92.47%
Profit Quality 10.47%
Current Ratio 1.03
Quick Ratio 1.03
Altman-Z 2.3
F-Score6
WACC7.55%
ROIC/WACC0.47
Cap/Depr(3y)189.85%
Cap/Depr(5y)190.42%
Cap/Sales(3y)59.77%
Cap/Sales(5y)58.27%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)44.85%
EPS 3Y17.41%
EPS 5Y6.12%
EPS Q2Q%16.47%
EPS Next Y-27.41%
EPS Next 2Y-10.69%
EPS Next 3Y-5.83%
EPS Next 5Y-3.19%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%16.12%
Revenue Next Year4.64%
Revenue Next 2Y5.08%
Revenue Next 3Y6.16%
Revenue Next 5Y6.76%
EBIT growth 1Y4.86%
EBIT growth 3Y7.65%
EBIT growth 5Y1.41%
EBIT Next Year87.89%
EBIT Next 3Y27.74%
EBIT Next 5Y17.96%
FCF growth 1Y122.06%
FCF growth 3Y0.87%
FCF growth 5YN/A
OCF growth 1Y18.47%
OCF growth 3Y8.55%
OCF growth 5Y3.7%