EQUITY RESIDENTIAL (EQR) Stock Fundamental Analysis
NYSE:EQR - New York Stock Exchange, Inc. - US29476L1070 - REIT
We assign a fundamental rating of 5 out of 10 to EQR. EQR was compared to 20 industry peers in the Residential REITs industry. While EQR has a great profitability rating, there are quite some concerns on its financial health. EQR is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
EQR had positive earnings in the past year.
EQR had a positive operating cash flow in the past year.
EQR had positive earnings in each of the past 5 years.
In the past 5 years EQR always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of EQR (4.42%) is better than 90.00% of its industry peers.
Looking at the Return On Equity, with a value of 8.52%, EQR is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
EQR's Return On Invested Capital of 3.53% is amongst the best of 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 (3.09%) for EQR is below the current ROIC(3.53%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.42% | ||
| ROE | 8.52% | ||
| ROIC | 3.53% |
ROA(3y)4.75%
ROA(5y)4.66%
ROE(3y)8.86%
ROE(5y)8.92%
ROIC(3y)3.09%
ROIC(5y)3.19%
1.3 Margins
EQR's Profit Margin of 31.45% is amongst the best of the industry. EQR outperforms 90.00% of its industry peers.
EQR's Profit Margin has improved in the last couple of years.
The Operating Margin of EQR (30.47%) is better than 85.00% of its industry peers.
In the last couple of years the Operating Margin of EQR has declined.
EQR has a better Gross Margin (63.64%) than 80.00% of its industry peers.
EQR's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.47% | ||
| PM (TTM) | 31.45% | ||
| GM | 63.64% |
OM growth 3Y-0.02%
OM growth 5Y-1.71%
PM growth 3Y-6.48%
PM growth 5Y2.67%
GM growth 3Y-0.4%
GM growth 5Y-0.7%
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 more shares outstanding than it did 1 year ago.
EQR has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, EQR has a worse debt to assets ratio.
2.2 Solvency
EQR has an Altman-Z score of 1.86. 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.
The Altman-Z score of EQR (1.86) is better than 85.00% of its industry peers.
EQR has a Debt/Equity ratio of 0.77. This is a neutral value indicating EQR is somewhat dependend on debt financing.
EQR's Debt to Equity ratio of 0.77 is fine compared to the rest of the industry. EQR outperforms 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.86 |
ROIC/WACC0.45
WACC7.8%
2.3 Liquidity
A Current Ratio of 0.02 indicates that EQR may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.02, EQR is doing worse than 90.00% of the companies in the same industry.
EQR has a Quick Ratio of 0.02. 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 0.02. This is amonst the worse of the industry: EQR underperforms 90.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.02 | ||
| Quick Ratio | 0.02 |
3. Growth
3.1 Past
EQR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 35.56%, which is quite impressive.
Measured over the past 5 years, EQR shows a small growth in Earnings Per Share. The EPS has been growing by 4.21% on average per year.
Looking at the last year, EQR shows a small growth in Revenue. The Revenue has grown by 3.33% in the last year.
Measured over the past years, EQR shows a small growth in Revenue. The Revenue has been growing by 2.20% on average per year.
EPS 1Y (TTM)35.56%
EPS 3Y-3.52%
EPS 5Y4.21%
EPS Q2Q%-15.56%
Revenue 1Y (TTM)3.33%
Revenue growth 3Y3.77%
Revenue growth 5Y2.2%
Sales Q2Q%3.35%
3.2 Future
The Earnings Per Share is expected to decrease by -2.90% on average over the next years.
Based on estimates for the next years, EQR will show a small growth in Revenue. The Revenue will grow by 3.81% on average per year.
EPS Next Y-4.51%
EPS Next 2Y-12.86%
EPS Next 3Y-5.91%
EPS Next 5Y-2.9%
Revenue Next Year3.24%
Revenue Next 2Y3.67%
Revenue Next 3Y3.88%
Revenue Next 5Y3.81%
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
With a Price/Earnings ratio of 28.74, EQR can be considered very expensive at the moment.
Based on the Price/Earnings ratio, EQR is valued cheaper than 90.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of EQR to the average of the S&P500 Index (28.29), we can say EQR is valued inline with the index average.
A Price/Forward Earnings ratio of 41.98 indicates a quite expensive valuation of 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.
When comparing the Price/Forward Earnings ratio of EQR to the average of the S&P500 Index (24.44), we can say EQR is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.74 | ||
| Fwd PE | 41.98 |
4.2 Price Multiples
EQR's Enterprise Value to EBITDA is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 18.86 |
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 -5.91% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)6.83
EPS Next 2Y-12.86%
EPS Next 3Y-5.91%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.84%, EQR has a reasonable but not impressive dividend return.
EQR's Dividend Yield is comparable with the industry average which is at 4.29.
Compared to an average S&P500 Dividend Yield of 2.28, EQR pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.84% |
5.2 History
The dividend of EQR has a limited annual growth rate of 4.21%.
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)4.21%
Div Incr Years2
Div Non Decr Years13
5.3 Sustainability
109.99% of the earnings are spent on dividend by EQR. 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.
DP109.99%
EPS Next 2Y-12.86%
EPS Next 3Y-5.91%
EQUITY RESIDENTIAL
NYSE:EQR (1/21/2025, 8:04:00 PM)
After market: 70.13 0 (0%)70.13
+0.36 (+0.52%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners94.87%
Inst Owner Change-0.03%
Ins Owners0.48%
Ins Owner Change-1.16%
Market Cap26.60B
Analysts71.03
Price Target80.63 (14.97%)
Short Float %1.67%
Short Ratio4.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.84% |
Yearly Dividend2.62
Dividend Growth(5Y)4.21%
DP109.99%
Div Incr Years2
Div Non Decr Years13
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.58%
Min EPS beat(2)-10.24%
Max EPS beat(2)21.4%
EPS beat(4)3
Avg EPS beat(4)57.53%
Min EPS beat(4)-10.24%
Max EPS beat(4)129.76%
EPS beat(8)6
Avg EPS beat(8)39.09%
EPS beat(12)9
Avg EPS beat(12)63.04%
EPS beat(16)12
Avg EPS beat(16)84.1%
Revenue beat(2)0
Avg Revenue beat(2)-0.71%
Min Revenue beat(2)-1.02%
Max Revenue beat(2)-0.4%
Revenue beat(4)0
Avg Revenue beat(4)-0.62%
Min Revenue beat(4)-1.02%
Max Revenue beat(4)-0.36%
Revenue beat(8)0
Avg Revenue beat(8)-0.84%
Revenue beat(12)2
Avg Revenue beat(12)-0.63%
Revenue beat(16)4
Avg Revenue beat(16)-0.4%
PT rev (1m)0.33%
PT rev (3m)2.1%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.08%
EPS NY rev (1m)0%
EPS NY rev (3m)0.89%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.85%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)0.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.74 | ||
| Fwd PE | 41.98 | ||
| P/S | 9.05 | ||
| P/FCF | N/A | ||
| P/OCF | 17.01 | ||
| P/B | 2.45 | ||
| P/tB | 2.45 | ||
| EV/EBITDA | 18.86 |
EPS(TTM)2.44
EY3.48%
EPS(NY)1.67
Fwd EY2.38%
FCF(TTM)-0.49
FCFYN/A
OCF(TTM)4.12
OCFY5.88%
SpS7.75
BVpS28.61
TBVpS28.61
PEG (NY)N/A
PEG (5Y)6.83
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.42% | ||
| ROE | 8.52% | ||
| ROCE | 4.65% | ||
| ROIC | 3.53% | ||
| ROICexc | 3.53% | ||
| ROICexgc | 3.58% | ||
| OM | 30.47% | ||
| PM (TTM) | 31.45% | ||
| GM | 63.64% | ||
| FCFM | N/A |
ROA(3y)4.75%
ROA(5y)4.66%
ROE(3y)8.86%
ROE(5y)8.92%
ROIC(3y)3.09%
ROIC(5y)3.19%
ROICexc(3y)3.1%
ROICexc(5y)3.2%
ROICexgc(3y)3.14%
ROICexgc(5y)3.25%
ROCE(3y)3.96%
ROCE(5y)4.09%
ROICexcg growth 3Y4.1%
ROICexcg growth 5Y0.99%
ROICexc growth 3Y4.16%
ROICexc growth 5Y1.14%
OM growth 3Y-0.02%
OM growth 5Y-1.71%
PM growth 3Y-6.48%
PM growth 5Y2.67%
GM growth 3Y-0.4%
GM growth 5Y-0.7%
F-Score5
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.62 | ||
| Cap/Depr | 191.4% | ||
| Cap/Sales | 59.54% | ||
| Interest Coverage | 3.73 | ||
| Cash Conversion | 86.34% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.02 | ||
| Quick Ratio | 0.02 | ||
| Altman-Z | 1.86 |
F-Score5
WACC7.8%
ROIC/WACC0.45
Cap/Depr(3y)126.42%
Cap/Depr(5y)132.13%
Cap/Sales(3y)41.87%
Cap/Sales(5y)42.56%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)35.56%
EPS 3Y-3.52%
EPS 5Y4.21%
EPS Q2Q%-15.56%
EPS Next Y-4.51%
EPS Next 2Y-12.86%
EPS Next 3Y-5.91%
EPS Next 5Y-2.9%
Revenue 1Y (TTM)3.33%
Revenue growth 3Y3.77%
Revenue growth 5Y2.2%
Sales Q2Q%3.35%
Revenue Next Year3.24%
Revenue Next 2Y3.67%
Revenue Next 3Y3.88%
Revenue Next 5Y3.81%
EBIT growth 1Y1.45%
EBIT growth 3Y3.75%
EBIT growth 5Y0.45%
EBIT Next Year97.85%
EBIT Next 3Y29.43%
EBIT Next 5Y18.38%
FCF growth 1Y-163.25%
FCF growth 3Y-0.86%
FCF growth 5Y21.88%
OCF growth 1Y11.51%
OCF growth 3Y6.6%
OCF growth 5Y2.48%