EQUITY RESIDENTIAL (EQR) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EQR - US29476L1070 - REIT
60.76 USD
-1.39 (-2.24%)
60.76 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to EQR. EQR was compared to 20 industry peers in the Residential REITs industry. While EQR is still in line with the averages on profitability rating, there are concerns on its financial health. EQR has a correct valuation and a medium 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.
- Each year in the past 5 years EQR has been profitable.
- EQR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- EQR's Return On Assets of 5.49% is fine compared to the rest of the industry. EQR outperforms 80.00% of its industry peers.
- EQR's Return On Equity of 10.43% is fine compared to the rest of the industry. EQR outperforms 80.00% of its industry peers.
- The Return On Invested Capital of EQR (3.36%) is better than 80.00% of its industry peers.
- EQR had an Average Return On Invested Capital over the past 3 years of 3.44%. This is in line with the industry average of 2.59%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.49% | ||
| ROE | 10.43% | ||
| ROIC | 3.36% |
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
- The Profit Margin of EQR (37.54%) is better than 80.00% of its industry peers.
- In the last couple of years the Profit Margin of EQR has remained more or less at the same level.
- EQR's Operating Margin of 27.91% is fine compared to the rest 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 Gross Margin of 63.01%. This is amongst the best in the industry. EQR outperforms 85.00% of its industry peers.
- EQR's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.91% | ||
| PM (TTM) | 37.54% | ||
| GM | 63.01% |
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.
- The number of shares outstanding for EQR has been increased compared to 5 years ago.
- The debt/assets ratio for EQR is higher compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 1.69, we must say that EQR is in the distress zone and has some risk of bankruptcy.
- With an excellent Altman-Z score value of 1.69, EQR belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
- The Debt to FCF ratio of EQR is 31.82, which is on the high side as it means it would take EQR, 31.82 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of EQR (31.82) is better than 65.00% of its industry peers.
- EQR has a Debt/Equity ratio of 0.76. This is a neutral value indicating EQR is somewhat dependend on debt financing.
- The Debt to Equity ratio of EQR (0.76) is better than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 31.82 | ||
| Altman-Z | 1.69 |
ROIC/WACC0.46
WACC7.25%
2.3 Liquidity
- EQR has a Current Ratio of 0.07. 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 (0.07) is worse than 85.00% of its industry peers.
- A Quick Ratio of 0.07 indicates that EQR may have some problems paying its short term obligations.
- The Quick ratio of EQR (0.07) is worse than 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.07 | ||
| Quick Ratio | 0.07 |
3. Growth
3.1 Past
- EQR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 24.18%, which is quite impressive.
- EQR shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.98% yearly.
- EQR shows a small growth in Revenue. In the last year, the Revenue has grown by 4.69%.
- 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)24.18%
EPS 3Y-8.41%
EPS 5Y0.98%
EPS Q2Q%100%
Revenue 1Y (TTM)4.69%
Revenue growth 3Y6.54%
Revenue growth 5Y1.99%
Sales Q2Q%4.55%
3.2 Future
- The Earnings Per Share is expected to decrease by -8.58% on average over the next years.
- The Revenue is expected to grow by 4.47% on average over the next years.
EPS Next Y-18.61%
EPS Next 2Y-27.06%
EPS Next 3Y-16.51%
EPS Next 5Y-8.58%
Revenue Next Year4.47%
Revenue Next 2Y3.94%
Revenue Next 3Y3.73%
Revenue Next 5Y4.47%
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 20.05, the valuation of EQR can be described as rather expensive.
- Based on the Price/Earnings ratio, EQR is valued cheaper than 90.00% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.60. EQR is valued slightly cheaper when compared to this.
- With a Price/Forward Earnings ratio of 41.99, EQR can be considered very expensive at the moment.
- EQR's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. EQR is cheaper than 65.00% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. EQR is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.05 | ||
| Fwd PE | 41.99 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, EQR is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
- The rest of the industry has a similar Price/Free Cash Flow ratio as EQR.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 87.21 | ||
| EV/EBITDA | 16.6 |
4.3 Compensation for Growth
- The decent profitability rating of EQR may justify a higher PE ratio.
- EQR's earnings are expected to decrease with -16.51% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)20.37
EPS Next 2Y-27.06%
EPS Next 3Y-16.51%
5. Dividend
5.1 Amount
- EQR has a Yearly Dividend Yield of 4.54%, which is a nice return.
- EQR's Dividend Yield is comparable with the industry average which is at 32.02.
- Compared to an average S&P500 Dividend Yield of 1.82, EQR pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.54% |
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.
Dividend Growth(5Y)3.64%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 89.99% 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.
DP89.99%
EPS Next 2Y-27.06%
EPS Next 3Y-16.51%
EQUITY RESIDENTIAL / EQR FAQ
What is the fundamental rating for EQR stock?
ChartMill assigns a fundamental rating of 4 / 10 to EQR.
Can you provide the valuation status for EQUITY RESIDENTIAL?
ChartMill assigns a valuation rating of 4 / 10 to EQUITY RESIDENTIAL (EQR). This can be considered as Fairly Valued.
How profitable is EQUITY RESIDENTIAL (EQR) stock?
EQUITY RESIDENTIAL (EQR) has a profitability rating of 6 / 10.
Can you provide the PE and PB ratios for EQR stock?
The Price/Earnings (PE) ratio for EQUITY RESIDENTIAL (EQR) is 20.05 and the Price/Book (PB) ratio is 2.09.
What is the earnings growth outlook for EQUITY RESIDENTIAL?
The Earnings per Share (EPS) of EQUITY RESIDENTIAL (EQR) is expected to decline by -18.61% in the next year.