AVALONBAY COMMUNITIES INC (AVB) Stock Fundamental Analysis
NYSE:AVB - New York Stock Exchange, Inc. - US0534841012 - REIT
Overall AVB gets a fundamental rating of 5 out of 10. We evaluated AVB against 20 industry peers in the Residential REITs industry. AVB has an excellent profitability rating, but there are some minor concerns on its financial health. AVB is valied quite expensively at the moment, while 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.
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
AVB has a Return On Assets of 4.88%. This is amongst the best in the industry. AVB outperforms 95.00% of its industry peers.
AVB has a Return On Equity of 8.75%. This is amongst the best in the industry. AVB outperforms 85.00% of its industry peers.
AVB has a Return On Invested Capital of 3.57%. This is amongst the best in the industry. AVB outperforms 90.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AVB is in line with the industry average of 2.61%.
The 3 year average ROIC (3.08%) for AVB is below the current ROIC(3.57%), indicating increased profibility in the last year.
| Industry Rank | Sector 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%
1.3 Margins
With an excellent Profit Margin value of 36.13%, AVB belongs to the best 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.
In the last couple of years the Operating Margin of AVB has declined.
With an excellent Gross Margin value of 63.79%, AVB belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
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 | 31.82% | ||
| 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%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AVB is destroying value.
AVB has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, AVB has more shares outstanding
Compared to 1 year ago, AVB has an improved debt to assets ratio.
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.
The Altman-Z score of AVB (2.30) is better 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.
AVB has a Debt to FCF ratio of 77.10. This is in the lower half of the industry: AVB underperforms 60.00% of its industry peers.
A Debt/Equity ratio of 0.71 indicates that AVB is somewhat dependend on debt financing.
With an excellent Debt to Equity ratio value of 0.71, AVB belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | 77.1 | ||
| Altman-Z | 2.3 |
ROIC/WACC0.46
WACC7.71%
2.3 Liquidity
A Current Ratio of 1.03 indicates that AVB should not have too much problems paying its short term obligations.
AVB has a Current ratio of 1.03. This is in the better half 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 Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
AVB shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 38.97%, which is quite impressive.
The Earnings Per Share has been decreasing by -5.76% on average over the past years.
AVB shows a small growth in Revenue. In the last year, the Revenue has grown by 5.31%.
The Revenue has been growing slightly by 3.91% on average over the past years.
EPS 1Y (TTM)38.97%
EPS 3Y-3.82%
EPS 5Y-5.76%
EPS Q2Q%115.7%
Revenue 1Y (TTM)5.31%
Revenue growth 3Y6.35%
Revenue growth 5Y3.91%
Sales Q2Q%5.02%
3.2 Future
Based on estimates for the next years, AVB will show a small growth in Earnings Per Share. The EPS will grow by 3.93% on average per year.
The Revenue is expected to grow by 5.95% on average over the next years.
EPS Next Y23.13%
EPS Next 2Y3.11%
EPS Next 3Y4.78%
EPS Next 5Y3.93%
Revenue Next Year5.1%
Revenue Next 2Y4.95%
Revenue Next 3Y5.15%
Revenue Next 5Y5.95%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
AVB is valuated quite expensively with a Price/Earnings ratio of 29.99.
AVB's Price/Earnings ratio is rather cheap when compared to the industry. AVB is cheaper than 85.00% of the companies in the same industry.
AVB's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.29.
Based on the Price/Forward Earnings ratio of 39.35, the valuation of AVB can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AVB indicates a rather cheap valuation: AVB is cheaper than 85.00% of the companies listed in the same industry.
AVB's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 24.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.99 | ||
| Fwd PE | 39.35 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AVB is valued a bit more expensive than the industry average as 70.00% of the companies are valued more cheaply.
Based on the Price/Free Cash Flow ratio, AVB is valued a bit more expensive than 60.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 286.38 | ||
| EV/EBITDA | 22.2 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
AVB has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.3
PEG (5Y)N/A
EPS Next 2Y3.11%
EPS Next 3Y4.78%
5. Dividend
5.1 Amount
AVB has a Yearly Dividend Yield of 3.12%. Purely for dividend investing, there may be better candidates out there.
AVB's Dividend Yield is slightly below the industry average, which is at 4.29.
AVB's Dividend Yield is a higher than the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.12% |
5.2 History
The dividend of AVB has a limited annual growth rate of 2.39%.
AVB has paid a dividend for at least 10 years, which is 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
5.3 Sustainability
91.77% of the earnings are spent on dividend by AVB. This is not a sustainable payout ratio.
The dividend of AVB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP91.77%
EPS Next 2Y3.11%
EPS Next 3Y4.78%
AVALONBAY COMMUNITIES INC
NYSE:AVB (1/21/2025, 8:04:00 PM)
After market: 219.24 0 (0%)219.24
+1.1 (+0.5%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners93.04%
Inst Owner Change-0.33%
Ins Owners0.36%
Ins Owner Change-7.61%
Market Cap31.18B
Analysts73.33
Price Target245.66 (12.05%)
Short Float %2.23%
Short Ratio5.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.12% |
Yearly Dividend6.54
Dividend Growth(5Y)2.39%
DP91.77%
Div Incr Years2
Div Non Decr Years26
Ex-DateN/A
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)1.24%
PT rev (3m)5.22%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.13%
EPS NY rev (1m)0%
EPS NY rev (3m)9.58%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.99 | ||
| Fwd PE | 39.35 | ||
| P/S | 10.84 | ||
| P/FCF | 286.38 | ||
| P/OCF | 19.19 | ||
| P/B | 2.62 | ||
| P/tB | 2.62 | ||
| EV/EBITDA | 22.2 |
EPS(TTM)7.31
EY3.33%
EPS(NY)5.57
Fwd EY2.54%
FCF(TTM)0.77
FCFY0.35%
OCF(TTM)11.43
OCFY5.21%
SpS20.23
BVpS83.56
TBVpS83.56
PEG (NY)1.3
PEG (5Y)N/A
Profitability
| Industry Rank | Sector 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 Rank | Sector 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
WACC7.71%
ROIC/WACC0.46
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)38.97%
EPS 3Y-3.82%
EPS 5Y-5.76%
EPS Q2Q%115.7%
EPS Next Y23.13%
EPS Next 2Y3.11%
EPS Next 3Y4.78%
EPS Next 5Y3.93%
Revenue 1Y (TTM)5.31%
Revenue growth 3Y6.35%
Revenue growth 5Y3.91%
Sales Q2Q%5.02%
Revenue Next Year5.1%
Revenue Next 2Y4.95%
Revenue Next 3Y5.15%
Revenue Next 5Y5.95%
EBIT growth 1Y4.86%
EBIT growth 3Y7.65%
EBIT growth 5Y1.41%
EBIT Next Year87.79%
EBIT Next 3Y27.84%
EBIT Next 5Y18.21%
FCF growth 1Y122.06%
FCF growth 3Y0.87%
FCF growth 5YN/A
OCF growth 1Y18.47%
OCF growth 3Y8.55%
OCF growth 5Y3.7%