EQUITY RESIDENTIAL (EQR) Stock Fundamental Analysis
NYSE:EQR - New York Stock Exchange, Inc. - US29476L1070 - REIT - Currency: USD
We assign a fundamental rating of 5 out of 10 to EQR. EQR was compared to 20 industry peers in the Residential REITs industry. EQR has an excellent profitability rating, but there are concerns on its financial health. While showing a medium growth rate, EQR is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year EQR was profitable.
In the past year EQR had a positive cash flow from operations.
Each year in the past 5 years EQR has been profitable.
In the past 5 years EQR always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 4.96%, EQR belongs to the best of the industry, outperforming 95.00% of the companies in the same industry.
The Return On Equity of EQR (9.35%) is better than 85.00% of its industry peers.
EQR has a Return On Invested Capital of 3.44%. This is amongst the best in the industry. EQR outperforms 85.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for EQR is in line with the industry average of 2.61%.
The 3 year average ROIC (3.44%) for EQR is below the current ROIC(3.44%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.96% | ||
| ROE | 9.35% | ||
| ROIC | 3.44% |
ROA(3y)4.31%
ROA(5y)4.74%
ROE(3y)7.93%
ROE(5y)8.91%
ROIC(3y)3.44%
ROIC(5y)3.17%
1.3 Margins
EQR's Profit Margin of 34.66% is amongst the best of the industry. EQR outperforms 95.00% of its industry peers.
EQR's Profit Margin has been stable in the last couple of years.
With a decent Operating Margin value of 29.25%, EQR is doing good in the industry, outperforming 80.00% of the companies in the same industry.
In the last couple of years the Operating Margin of EQR has declined.
EQR's Gross Margin of 63.27% is fine compared to the rest of the industry. EQR outperforms 80.00% of its industry peers.
In the last couple of years the Gross Margin of EQR has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.25% | ||
| PM (TTM) | 34.66% | ||
| GM | 63.27% |
OM growth 3Y5.12%
OM growth 5Y-2.76%
PM growth 3Y-13.73%
PM growth 5Y-0.66%
GM growth 3Y0.95%
GM growth 5Y-0.95%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), EQR is destroying value.
EQR has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, EQR has more shares outstanding
EQR has a worse debt/assets ratio than last year.
2.2 Solvency
EQR has an Altman-Z score of 1.97. This is not the best score and indicates that EQR is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 1.97, EQR belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
A Debt/Equity ratio of 0.74 indicates that EQR is somewhat dependend on debt financing.
EQR's Debt to Equity ratio of 0.74 is fine compared to the rest of the industry. EQR outperforms 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.74 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.97 |
ROIC/WACC0.45
WACC7.67%
2.3 Liquidity
A Current Ratio of 0.05 indicates that EQR may have some problems paying its short term obligations.
The Current ratio of EQR (0.05) is worse than 90.00% of its industry peers.
EQR has a Quick Ratio of 0.05. This is a bad value and indicates that EQR is not financially healthy enough and could expect problems in meeting its short term obligations.
EQR has a Quick ratio of 0.05. This is amonst the worse of the industry: EQR 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 23.64% over the past year.
EQR shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.98% yearly.
The Revenue has been growing slightly by 3.69% in the past year.
Measured over the past years, EQR shows a small growth in Revenue. The Revenue has been growing by 1.99% on average per year.
EPS 1Y (TTM)23.64%
EPS 3Y-8.41%
EPS 5Y0.98%
EPS Q2Q%34.15%
Revenue 1Y (TTM)3.69%
Revenue growth 3Y6.54%
Revenue growth 5Y1.99%
Sales Q2Q%5.4%
3.2 Future
Based on estimates for the next years, EQR will show a decrease in Earnings Per Share. The EPS will decrease by -5.87% on average per year.
Based on estimates for the next years, EQR will show a small growth in Revenue. The Revenue will grow by 3.68% on average per year.
EPS Next Y-44.5%
EPS Next 2Y-22.64%
EPS Next 3Y-13.11%
EPS Next 5Y-5.87%
Revenue Next Year4.77%
Revenue Next 2Y4.49%
Revenue Next 3Y4.91%
Revenue Next 5Y3.68%
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.
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
Based on the Price/Earnings ratio of 26.31, the valuation of EQR can be described as expensive.
EQR's Price/Earnings ratio is rather cheap when compared to the industry. EQR is cheaper than 90.00% of the companies in the same industry.
EQR's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 29.63.
The Price/Forward Earnings ratio is 47.40, which means the current valuation is very expensive for EQR.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EQR indicates a somewhat cheap valuation: EQR is cheaper than 75.00% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.68, EQR is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.31 | ||
| Fwd PE | 47.4 |
4.2 Price Multiples
EQR's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. EQR is cheaper than 65.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 19.01 |
4.3 Compensation for Growth
EQR has an outstanding profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as EQR's earnings are expected to decrease with -13.11% in the coming years.
PEG (NY)N/A
PEG (5Y)26.73
EPS Next 2Y-22.64%
EPS Next 3Y-13.11%
5. Dividend
5.1 Amount
EQR has a Yearly Dividend Yield of 3.77%.
EQR's Dividend Yield is comparable with the industry average which is at 4.25.
Compared to an average S&P500 Dividend Yield of 2.27, EQR pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.77% |
5.2 History
The dividend of EQR has a limited annual growth rate of 3.64%.
EQR has been paying a dividend for at least 10 years, so it has a reliable track record.
EQR has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.64%
Div Incr Years2
Div Non Decr Years13
5.3 Sustainability
98.90% of the earnings are spent on dividend by EQR. This is not a sustainable payout ratio.
EQR's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP98.9%
EPS Next 2Y-22.64%
EPS Next 3Y-13.11%
71.56
-0.1 (-0.14%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners95.59%
Inst Owner Change-83.77%
Ins Owners0.49%
Ins Owner Change1.91%
Market Cap27.16B
Analysts71.33
Price Target79.47 (11.05%)
Short Float %1.54%
Short Ratio3.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.77% |
Yearly Dividend2.69
Dividend Growth(5Y)3.64%
DP98.9%
Div Incr Years2
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)74.79%
Min EPS beat(2)-10.24%
Max EPS beat(2)159.82%
EPS beat(4)3
Avg EPS beat(4)75.18%
Min EPS beat(4)-10.24%
Max EPS beat(4)159.82%
EPS beat(8)6
Avg EPS beat(8)58.18%
EPS beat(12)9
Avg EPS beat(12)58.03%
EPS beat(16)12
Avg EPS beat(16)82.53%
Revenue beat(2)1
Avg Revenue beat(2)0.01%
Min Revenue beat(2)-0.4%
Max Revenue beat(2)0.43%
Revenue beat(4)1
Avg Revenue beat(4)-0.34%
Min Revenue beat(4)-1.02%
Max Revenue beat(4)0.43%
Revenue beat(8)1
Avg Revenue beat(8)-0.59%
Revenue beat(12)2
Avg Revenue beat(12)-0.66%
Revenue beat(16)5
Avg Revenue beat(16)-0.33%
PT rev (1m)-1.43%
PT rev (3m)-0.88%
EPS NQ rev (1m)-13.21%
EPS NQ rev (3m)-12.91%
EPS NY rev (1m)-9.63%
EPS NY rev (3m)-11.39%
Revenue NQ rev (1m)0.84%
Revenue NQ rev (3m)2.08%
Revenue NY rev (1m)0.61%
Revenue NY rev (3m)1.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.31 | ||
| Fwd PE | 47.4 | ||
| P/S | 9.11 | ||
| P/FCF | N/A | ||
| P/OCF | 17.26 | ||
| P/B | 2.46 | ||
| P/tB | 2.46 | ||
| EV/EBITDA | 19.01 |
EPS(TTM)2.72
EY3.8%
EPS(NY)1.51
Fwd EY2.11%
FCF(TTM)-1.2
FCFYN/A
OCF(TTM)4.15
OCFY5.79%
SpS7.85
BVpS29.1
TBVpS29.1
PEG (NY)N/A
PEG (5Y)26.73
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.96% | ||
| ROE | 9.35% | ||
| ROCE | 4.48% | ||
| ROIC | 3.44% | ||
| ROICexc | 3.45% | ||
| ROICexgc | 3.5% | ||
| OM | 29.25% | ||
| PM (TTM) | 34.66% | ||
| GM | 63.27% | ||
| FCFM | N/A |
ROA(3y)4.31%
ROA(5y)4.74%
ROE(3y)7.93%
ROE(5y)8.91%
ROIC(3y)3.44%
ROIC(5y)3.17%
ROICexc(3y)3.45%
ROICexc(5y)3.18%
ROICexgc(3y)3.5%
ROICexgc(5y)3.23%
ROCE(3y)4.43%
ROCE(5y)4.09%
ROICexcg growth 3Y12.87%
ROICexcg growth 5Y-0.44%
ROICexc growth 3Y12.89%
ROICexc growth 5Y-0.48%
OM growth 3Y5.12%
OM growth 5Y-2.76%
PM growth 3Y-13.73%
PM growth 5Y-0.66%
GM growth 3Y0.95%
GM growth 5Y-0.95%
F-Score6
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.74 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.45 | ||
| Cap/Depr | 213.1% | ||
| Cap/Sales | 68.09% | ||
| Interest Coverage | 3.62 | ||
| Cash Conversion | 86.28% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.05 | ||
| Quick Ratio | 0.05 | ||
| Altman-Z | 1.97 |
F-Score6
WACC7.67%
ROIC/WACC0.45
Cap/Depr(3y)115.1%
Cap/Depr(5y)129.08%
Cap/Sales(3y)36.55%
Cap/Sales(5y)42.13%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)23.64%
EPS 3Y-8.41%
EPS 5Y0.98%
EPS Q2Q%34.15%
EPS Next Y-44.5%
EPS Next 2Y-22.64%
EPS Next 3Y-13.11%
EPS Next 5Y-5.87%
Revenue 1Y (TTM)3.69%
Revenue growth 3Y6.54%
Revenue growth 5Y1.99%
Sales Q2Q%5.4%
Revenue Next Year4.77%
Revenue Next 2Y4.49%
Revenue Next 3Y4.91%
Revenue Next 5Y3.68%
EBIT growth 1Y-0.72%
EBIT growth 3Y12%
EBIT growth 5Y-0.83%
EBIT Next Year104.14%
EBIT Next 3Y31%
EBIT Next 5Y18.63%
FCF growth 1Y-156.31%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y2.66%
OCF growth 3Y7.68%
OCF growth 5Y1.55%