AVALONBAY COMMUNITIES INC (AVB) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AVB - US0534841012 - REIT
172.97 USD
-3.06 (-1.74%)
172.97 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to AVB. AVB was compared to 20 industry peers in the Residential REITs industry. While AVB has a great profitability rating, there are quite some concerns on its financial health. AVB does not seem to be growing, but still is valued expensively.
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.
- AVB had positive earnings in each of the past 5 years.
- AVB had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of AVB (5.31%) is better than 75.00% of its industry peers.
- With a decent Return On Equity value of 9.77%, AVB is doing good in the industry, outperforming 75.00% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 3.46%, AVB belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for AVB is in line with the industry average of 2.59%.
- The last Return On Invested Capital (3.46%) for AVB is above the 3 year average (3.44%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.31% | ||
| ROE | 9.77% | ||
| ROIC | 3.46% |
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
- With an excellent Profit Margin value of 38.71%, AVB belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
- AVB's Profit Margin has improved in the last couple of years.
- AVB has a better Operating Margin (30.35%) than 90.00% of its industry peers.
- AVB's Operating Margin has declined in the last couple of years.
- AVB's Gross Margin of 62.81% is fine compared to the rest of the industry. AVB outperforms 80.00% of its industry peers.
- AVB's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.35% | ||
| PM (TTM) | 38.71% | ||
| GM | 62.81% |
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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AVB is destroying value.
- Compared to 1 year ago, AVB has about the same amount of shares outstanding.
- The number of shares outstanding for AVB has been increased compared to 5 years ago.
- Compared to 1 year ago, AVB has an improved debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of 1.73, we must say that AVB is in the distress zone and has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 1.73, AVB belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
- A Debt/Equity ratio of 0.73 indicates that AVB is somewhat dependend on debt financing.
- AVB's Debt to Equity ratio of 0.73 is fine compared to the rest of the industry. AVB outperforms 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.73 |
ROIC/WACC0.48
WACC7.2%
2.3 Liquidity
- A Current Ratio of 0.12 indicates that AVB may have some problems paying its short term obligations.
- Looking at the Current ratio, with a value of 0.12, AVB is doing worse than 70.00% of the companies in the same industry.
- A Quick Ratio of 0.12 indicates that AVB may have some problems paying its short term obligations.
- AVB's Quick ratio of 0.12 is on the low side compared to the rest of the industry. AVB is outperformed by 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.12 | ||
| Quick Ratio | 0.12 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 12.18% 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 4.71% in the past year.
- Measured over the past years, AVB shows a small growth in Revenue. The Revenue has been growing by 4.62% on average per year.
EPS 1Y (TTM)12.18%
EPS 3Y17.41%
EPS 5Y6.12%
EPS Q2Q%2.68%
Revenue 1Y (TTM)4.71%
Revenue growth 3Y8.28%
Revenue growth 5Y4.62%
Sales Q2Q%4.67%
3.2 Future
- Based on estimates for the next years, AVB will show a decrease in Earnings Per Share. The EPS will decrease by -4.50% on average per year.
- AVB is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.45% yearly.
EPS Next Y-5.76%
EPS Next 2Y-16.07%
EPS Next 3Y-9.38%
EPS Next 5Y-4.5%
Revenue Next Year4.4%
Revenue Next 2Y4.13%
Revenue Next 3Y4.57%
Revenue Next 5Y5.45%
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 21.09, the valuation of AVB can be described as rather expensive.
- 85.00% of the companies in the same industry are more expensive than AVB, based on the Price/Earnings ratio.
- AVB is valuated rather cheaply when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 32.35, AVB can be considered very expensive at the moment.
- Based on the Price/Forward Earnings ratio, AVB is valued cheaper than 95.00% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of AVB to the average of the S&P500 Index (25.83), we can say AVB is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.09 | ||
| Fwd PE | 32.35 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AVB indicates a slightly more expensive valuation: AVB is more expensive than 65.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 18.29 |
4.3 Compensation for Growth
- The excellent profitability rating of AVB may justify a higher PE ratio.
- A cheap valuation may be justified as AVB's earnings are expected to decrease with -9.38% in the coming years.
PEG (NY)N/A
PEG (5Y)3.45
EPS Next 2Y-16.07%
EPS Next 3Y-9.38%
5. Dividend
5.1 Amount
- AVB has a Yearly Dividend Yield of 3.98%. Purely for dividend investing, there may be better candidates out there.
- AVB's Dividend Yield is slightly below the industry average, which is at 32.02.
- Compared to an average S&P500 Dividend Yield of 1.82, AVB pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.98% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)2.45%
Div Incr Years2
Div Non Decr Years26
5.3 Sustainability
- 84.41% of the earnings are spent on dividend by AVB. 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.
DP84.41%
EPS Next 2Y-16.07%
EPS Next 3Y-9.38%
AVALONBAY COMMUNITIES INC / AVB FAQ
Can you provide the ChartMill fundamental rating for AVALONBAY COMMUNITIES INC?
ChartMill assigns a fundamental rating of 4 / 10 to AVB.
What is the valuation status of AVALONBAY COMMUNITIES INC (AVB) stock?
ChartMill assigns a valuation rating of 3 / 10 to AVALONBAY COMMUNITIES INC (AVB). This can be considered as Overvalued.
Can you provide the profitability details for AVALONBAY COMMUNITIES INC?
AVALONBAY COMMUNITIES INC (AVB) has a profitability rating of 8 / 10.
What is the valuation of AVALONBAY COMMUNITIES INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for AVALONBAY COMMUNITIES INC (AVB) is 21.09 and the Price/Book (PB) ratio is 2.05.
Can you provide the expected EPS growth for AVB stock?
The Earnings per Share (EPS) of AVALONBAY COMMUNITIES INC (AVB) is expected to decline by -5.76% in the next year.