AVALONBAY COMMUNITIES INC (AVB) Stock Fundamental Analysis
NYSE:AVB - New York Stock Exchange, Inc. - US0534841012 - REIT - Currency: USD
AVB gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 20 industry peers in the Residential REITs industry. While AVB belongs to the best of the industry regarding profitability, there are concerns on its financial health. AVB is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year AVB was profitable.
AVB had a positive operating cash flow in the past year.
In the past 5 years AVB has always been profitable.
AVB had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AVB has a Return On Assets of 5.39%. This is amongst the best in the industry. AVB outperforms 95.00% of its industry peers.
AVB has a better Return On Equity (9.59%) than 90.00% of its industry peers.
With an excellent Return On Invested Capital value of 3.63%, AVB belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
AVB had an Average Return On Invested Capital over the past 3 years of 3.44%. This is in line with the industry average of 2.62%.
The 3 year average ROIC (3.44%) for AVB is below the current ROIC(3.63%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.39% | ||
| ROE | 9.59% | ||
| ROIC | 3.63% |
ROA(3y)5.06%
ROA(5y)4.9%
ROE(3y)9%
ROE(5y)8.77%
ROIC(3y)3.44%
ROIC(5y)3.18%
1.3 Margins
Looking at the Profit Margin, with a value of 38.79%, AVB belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Profit Margin of AVB has grown nicely.
Looking at the Operating Margin, with a value of 31.58%, AVB belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
In the last couple of years the Operating Margin of AVB has declined.
AVB has a Gross Margin of 63.13%. This is in the better half of the industry: AVB outperforms 80.00% of its industry peers.
In the last couple of years the Gross Margin of AVB has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.58% | ||
| PM (TTM) | 38.79% | ||
| GM | 63.13% |
OM growth 3Y5.59%
OM growth 5Y-2.68%
PM growth 3Y-5.32%
PM growth 5Y1.91%
GM growth 3Y0.2%
GM growth 5Y-1.16%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AVB is destroying value.
Compared to 1 year ago, AVB has about the same amount of shares outstanding.
Compared to 5 years ago, AVB has more shares outstanding
The debt/assets ratio for AVB has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.12 indicates that AVB 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 2.12, AVB belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
A Debt/Equity ratio of 0.70 indicates that AVB is somewhat dependend on debt financing.
AVB's Debt to Equity ratio of 0.70 is fine compared to the rest of the industry. AVB outperforms 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.12 |
ROIC/WACC0.48
WACC7.54%
2.3 Liquidity
A Current Ratio of 0.05 indicates that AVB may have some problems paying its short term obligations.
The Current ratio of AVB (0.05) is worse than 85.00% of its industry peers.
AVB has a Quick Ratio of 0.05. This is a bad value and indicates that AVB is not financially healthy enough and could expect problems in meeting its short term obligations.
AVB has a Quick ratio of 0.05. This is amonst the worse of the industry: AVB underperforms 85.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.05 | ||
| Quick Ratio | 0.05 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 48.43% over the past year.
The Earnings Per Share has been growing slightly by 6.12% on average over the past years.
The Revenue has been growing slightly by 5.01% in the past year.
The Revenue has been growing slightly by 4.62% on average over the past years.
EPS 1Y (TTM)48.43%
EPS 3Y17.41%
EPS 5Y6.12%
EPS Q2Q%36.07%
Revenue 1Y (TTM)5.01%
Revenue growth 3Y8.28%
Revenue growth 5Y4.62%
Sales Q2Q%4.65%
3.2 Future
AVB is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -2.56% yearly.
Based on estimates for the next years, AVB will show a small growth in Revenue. The Revenue will grow by 6.29% on average per year.
EPS Next Y-21.85%
EPS Next 2Y-12.81%
EPS Next 3Y-6.36%
EPS Next 5Y-2.56%
Revenue Next Year4.71%
Revenue Next 2Y4.92%
Revenue Next 3Y5.11%
Revenue Next 5Y6.29%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 25.15, the valuation of AVB can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of AVB indicates a rather cheap valuation: AVB is cheaper than 100.00% of the companies listed in the same industry.
AVB's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.51.
With a Price/Forward Earnings ratio of 35.00, AVB can be considered very expensive at the moment.
AVB's Price/Forward Earnings ratio is rather cheap when compared to the industry. AVB is cheaper than 95.00% of the companies in the same industry.
AVB's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 35.58.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.15 | ||
| Fwd PE | 35 |
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 20.76 |
4.3 Compensation for Growth
AVB has an outstanding profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as AVB's earnings are expected to decrease with -6.36% in the coming years.
PEG (NY)N/A
PEG (5Y)4.11
EPS Next 2Y-12.81%
EPS Next 3Y-6.36%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.45%, AVB has a reasonable but not impressive dividend return.
AVB's Dividend Yield is slightly below the industry average, which is at 4.70.
AVB's Dividend Yield is a higher than the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.45% |
5.2 History
The dividend of AVB has a limited annual growth rate of 2.45%.
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)2.45%
Div Incr Years2
Div Non Decr Years26
5.3 Sustainability
AVB pays out 84.74% of its income as dividend. This is not a sustainable payout ratio.
AVB's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP84.74%
EPS Next 2Y-12.81%
EPS Next 3Y-6.36%
201.95
+0.09 (+0.04%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners95.95%
Inst Owner Change0.02%
Ins Owners0.37%
Ins Owner Change6.25%
Market Cap28.75B
Analysts72.14
Price Target235.08 (16.41%)
Short Float %2.49%
Short Ratio3.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.45% |
Yearly Dividend6.77
Dividend Growth(5Y)2.45%
DP84.74%
Div Incr Years2
Div Non Decr Years26
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)32.26%
Min EPS beat(2)23.58%
Max EPS beat(2)40.95%
EPS beat(4)4
Avg EPS beat(4)45.74%
Min EPS beat(4)23.58%
Max EPS beat(4)78.32%
EPS beat(8)6
Avg EPS beat(8)23.86%
EPS beat(12)9
Avg EPS beat(12)31.52%
EPS beat(16)11
Avg EPS beat(16)30.51%
Revenue beat(2)0
Avg Revenue beat(2)-1%
Min Revenue beat(2)-1.14%
Max Revenue beat(2)-0.86%
Revenue beat(4)0
Avg Revenue beat(4)-0.75%
Min Revenue beat(4)-1.14%
Max Revenue beat(4)-0.13%
Revenue beat(8)0
Avg Revenue beat(8)-2.76%
Revenue beat(12)1
Avg Revenue beat(12)-2.53%
Revenue beat(16)3
Avg Revenue beat(16)-1.82%
PT rev (1m)-0.48%
PT rev (3m)-3.32%
EPS NQ rev (1m)-5.16%
EPS NQ rev (3m)-15.36%
EPS NY rev (1m)2.03%
EPS NY rev (3m)2.22%
Revenue NQ rev (1m)-0.19%
Revenue NQ rev (3m)0.2%
Revenue NY rev (1m)-0.16%
Revenue NY rev (3m)0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.15 | ||
| Fwd PE | 35 | ||
| P/S | 9.76 | ||
| P/FCF | N/A | ||
| P/OCF | 17.85 | ||
| P/B | 2.41 | ||
| P/tB | 2.41 | ||
| EV/EBITDA | 20.76 |
EPS(TTM)8.03
EY3.98%
EPS(NY)5.77
Fwd EY2.86%
FCF(TTM)-1.61
FCFYN/A
OCF(TTM)11.31
OCFY5.6%
SpS20.7
BVpS83.7
TBVpS83.7
PEG (NY)N/A
PEG (5Y)4.11
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.39% | ||
| ROE | 9.59% | ||
| ROCE | 4.6% | ||
| ROIC | 3.63% | ||
| ROICexc | 3.64% | ||
| ROICexgc | 3.64% | ||
| OM | 31.58% | ||
| PM (TTM) | 38.79% | ||
| GM | 63.13% | ||
| FCFM | N/A |
ROA(3y)5.06%
ROA(5y)4.9%
ROE(3y)9%
ROE(5y)8.77%
ROIC(3y)3.44%
ROIC(5y)3.18%
ROICexc(3y)3.5%
ROICexc(5y)3.24%
ROICexgc(3y)3.51%
ROICexgc(5y)3.24%
ROCE(3y)4.35%
ROCE(5y)4.03%
ROICexcg growth 3Y11.75%
ROICexcg growth 5Y0.03%
ROICexc growth 3Y11.82%
ROICexc growth 5Y0.06%
OM growth 3Y5.59%
OM growth 5Y-2.68%
PM growth 3Y-5.32%
PM growth 5Y1.91%
GM growth 3Y0.2%
GM growth 5Y-1.16%
F-Score5
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.7 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.67 | ||
| Cap/Depr | 215.91% | ||
| Cap/Sales | 62.46% | ||
| Interest Coverage | 4.3 | ||
| Cash Conversion | 90.35% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.05 | ||
| Quick Ratio | 0.05 | ||
| Altman-Z | 2.12 |
F-Score5
WACC7.54%
ROIC/WACC0.48
Cap/Depr(3y)183.94%
Cap/Depr(5y)179.75%
Cap/Sales(3y)55.28%
Cap/Sales(5y)55.46%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)48.43%
EPS 3Y17.41%
EPS 5Y6.12%
EPS Q2Q%36.07%
EPS Next Y-21.85%
EPS Next 2Y-12.81%
EPS Next 3Y-6.36%
EPS Next 5Y-2.56%
Revenue 1Y (TTM)5.01%
Revenue growth 3Y8.28%
Revenue growth 5Y4.62%
Sales Q2Q%4.65%
Revenue Next Year4.71%
Revenue Next 2Y4.92%
Revenue Next 3Y5.11%
Revenue Next 5Y6.29%
EBIT growth 1Y3.31%
EBIT growth 3Y14.34%
EBIT growth 5Y1.82%
EBIT Next Year80.43%
EBIT Next 3Y26.74%
EBIT Next 5Y17.25%
FCF growth 1Y-265.74%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y9.26%
OCF growth 3Y10.15%
OCF growth 5Y4%