EQUITY RESIDENTIAL (EQR) Stock Fundamental Analysis
NYSE:EQR - New York Stock Exchange, Inc. - US29476L1070 - REIT - Currency: USD
Taking everything into account, EQR scores 5 out of 10 in our fundamental rating. EQR was compared to 20 industry peers in the Residential REITs industry. While EQR belongs to the best of the industry regarding profitability, 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
EQR had positive earnings in the past year.
In the past year EQR had a positive cash flow from operations.
In the past 5 years EQR has always been profitable.
EQR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 4.96%, EQR belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
EQR has a Return On Equity of 9.35%. This is amongst the best in the industry. EQR outperforms 90.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.44%, EQR 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 EQR is in line with the industry average of 2.75%.
The last Return On Invested Capital (3.44%) for EQR is above the 3 year average (3.44%), which is a sign of increasing profitability.
| 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 has a better Profit Margin (34.66%) than 90.00% of its industry peers.
EQR's Profit Margin has been stable in the last couple of years.
EQR has a Operating Margin of 29.25%. This is in the better half of the industry: EQR outperforms 80.00% of its industry peers.
EQR's Operating Margin has declined in the last couple of years.
EQR has a better Gross Margin (63.27%) than 85.00% 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
EQR has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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
Compared to 1 year ago, EQR has a worse debt to assets ratio.
2.2 Solvency
EQR has an Altman-Z score of 1.92. 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.
EQR has a better Altman-Z score (1.92) than 85.00% of its industry peers.
A Debt/Equity ratio of 0.74 indicates that EQR is somewhat dependend on debt financing.
EQR has a Debt to Equity ratio of 0.74. This is in the better half of the industry: EQR outperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.74 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.92 |
ROIC/WACC0.47
WACC7.38%
2.3 Liquidity
EQR has a Current 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.
The Current ratio of EQR (0.05) is worse than 85.00% 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 20.33% over the past year.
The Earnings Per Share has been growing slightly by 0.98% on average over the past years.
EQR shows a small growth in Revenue. In the last year, the Revenue has grown by 3.69%.
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)20.33%
EPS 3Y-8.41%
EPS 5Y0.98%
EPS Q2Q%23.38%
Revenue 1Y (TTM)3.69%
Revenue growth 3Y6.54%
Revenue growth 5Y1.99%
Sales Q2Q%4.1%
3.2 Future
Based on estimates for the next years, EQR will show a very negative growth in Earnings Per Share. The EPS will decrease by -11.05% on average per year.
The Revenue is expected to grow by 4.15% on average over the next years.
EPS Next Y-51.33%
EPS Next 2Y-28.34%
EPS Next 3Y-17.49%
EPS Next 5Y-11.05%
Revenue Next Year5.51%
Revenue Next 2Y4.92%
Revenue Next 3Y4.81%
Revenue Next 5Y4.15%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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
Based on the Price/Earnings ratio of 24.23, the valuation of EQR can be described as rather expensive.
Based on the Price/Earnings ratio, EQR is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of EQR to the average of the S&P500 Index (28.88), we can say EQR is valued inline with the index average.
The Price/Forward Earnings ratio is 50.30, which means the current valuation is very expensive for EQR.
EQR's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. EQR is cheaper than 70.00% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of EQR to the average of the S&P500 Index (21.20), we can say EQR is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.23 | ||
| Fwd PE | 50.3 |
4.2 Price Multiples
EQR's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. EQR is cheaper than 70.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 18.6 |
4.3 Compensation for Growth
EQR has an outstanding profitability rating, which may justify a higher PE ratio.
EQR's earnings are expected to decrease with -17.49% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)24.61
EPS Next 2Y-28.34%
EPS Next 3Y-17.49%
5. Dividend
5.1 Amount
EQR has a Yearly Dividend Yield of 4.00%. Purely for dividend investing, there may be better candidates out there.
EQR's Dividend Yield is comparable with the industry average which is at 4.55.
Compared to an average S&P500 Dividend Yield of 2.45, EQR pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4% |
5.2 History
The dividend of EQR has a limited annual growth rate of 3.64%.
EQR has paid a dividend for at least 10 years, which is a reliable track record.
EQR has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)3.64%
Div Incr Years2
Div Non Decr Years13
5.3 Sustainability
EQR pays out 98.90% of its income as dividend. This is not a sustainable payout ratio.
The Dividend Rate of EQR has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP98.9%
EPS Next 2Y-28.34%
EPS Next 3Y-17.49%
70.26
+0.73 (+1.05%)
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 Change0.03%
Ins Owners0.49%
Ins Owner Change2.11%
Market Cap26.69B
Analysts71.33
Price Target79.01 (12.45%)
Short Float %1.51%
Short Ratio3.05
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4% |
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)-0.58%
PT rev (3m)-2.01%
EPS NQ rev (1m)0.57%
EPS NQ rev (3m)-18.46%
EPS NY rev (1m)-0.81%
EPS NY rev (3m)-20.74%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)0.55%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.23 | ||
| Fwd PE | 50.3 | ||
| P/S | 8.96 | ||
| P/FCF | N/A | ||
| P/OCF | 16.96 | ||
| P/B | 2.42 | ||
| P/tB | 2.42 | ||
| EV/EBITDA | 18.6 |
EPS(TTM)2.9
EY4.13%
EPS(NY)1.4
Fwd EY1.99%
FCF(TTM)-1.2
FCFYN/A
OCF(TTM)4.14
OCFY5.9%
SpS7.85
BVpS29.08
TBVpS29.08
PEG (NY)N/A
PEG (5Y)24.61
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 | 1.92 |
F-Score6
WACC7.38%
ROIC/WACC0.47
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)20.33%
EPS 3Y-8.41%
EPS 5Y0.98%
EPS Q2Q%23.38%
EPS Next Y-51.33%
EPS Next 2Y-28.34%
EPS Next 3Y-17.49%
EPS Next 5Y-11.05%
Revenue 1Y (TTM)3.69%
Revenue growth 3Y6.54%
Revenue growth 5Y1.99%
Sales Q2Q%4.1%
Revenue Next Year5.51%
Revenue Next 2Y4.92%
Revenue Next 3Y4.81%
Revenue Next 5Y4.15%
EBIT growth 1Y-0.72%
EBIT growth 3Y12%
EBIT growth 5Y-0.83%
EBIT Next Year103.93%
EBIT Next 3Y30.88%
EBIT Next 5Y19.07%
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%