EQUITY RESIDENTIAL (EQR)
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. EQR has an excellent profitability rating, but there are concerns on its financial health. EQR is valied quite expensively at the moment, while it does show a decent growth rate.
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.
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 4.42%, EQR belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
Looking at the Return On Equity, with a value of 8.52%, EQR is in the better half of the industry, outperforming 80.00% 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 has a better Profit Margin (31.45%) than 90.00% of its industry peers.
EQR's Profit Margin has improved in the last couple of years.
EQR has a Operating Margin of 30.47%. This is amongst the best in the industry. EQR outperforms 85.00% of its industry peers.
In the last couple of years the Operating Margin of EQR has declined.
EQR has a Gross Margin of 63.64%. This is in the better half of the industry: EQR outperforms 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.
Compared to 1 year ago, EQR has more shares outstanding
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
EQR has an Altman-Z score of 1.94. 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 1.94, EQR belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
A Debt/Equity ratio of 0.77 indicates that EQR is somewhat dependend on debt financing.
EQR has a better Debt to Equity ratio (0.77) than 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.94 |
ROIC/WACC0.46
WACC7.71%
2.3 Liquidity
EQR has a Current 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.
With a Current ratio value of 0.02, EQR is not doing good in the industry: 90.00% of the companies in the same industry are doing better.
A Quick Ratio of 0.02 indicates that EQR may have some problems paying 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.
EQR shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.21% yearly.
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
Based on estimates for the next years, EQR will show a decrease in Earnings Per Share. The EPS will decrease by -2.39% on average per year.
Based on estimates for the next years, EQR will show a small growth in Revenue. The Revenue will grow by 3.37% on average per year.
EPS Next Y-2.77%
EPS Next 2Y-12%
EPS Next 3Y-5.16%
EPS Next 5Y-2.39%
Revenue Next Year2.93%
Revenue Next 2Y3.37%
Revenue Next 3Y3.83%
Revenue Next 5Y3.37%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 30.76 indicates a quite expensive valuation of EQR.
Compared to the rest of the industry, the Price/Earnings ratio of EQR indicates a rather cheap valuation: EQR is cheaper than 90.00% of the companies listed in the same industry.
EQR is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.96, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 44.06, EQR can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, EQR is valued a bit cheaper than the industry average as 80.00% of the companies are valued more expensively.
EQR's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 23.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.76 | ||
| Fwd PE | 44.06 |
4.2 Price Multiples
65.00% of the companies in the same industry are more expensive than EQR, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 19.65 |
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 -5.16% in the coming years.
PEG (NY)N/A
PEG (5Y)7.3
EPS Next 2Y-12%
EPS Next 3Y-5.16%
5. Dividend
5.1 Amount
EQR has a Yearly Dividend Yield of 3.70%.
EQR's Dividend Yield is comparable with the industry average which is at 3.90.
Compared to an average S&P500 Dividend Yield of 2.23, EQR pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.7% |
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
EQR pays out 109.99% 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.
DP109.99%
EPS Next 2Y-12%
EPS Next 3Y-5.16%
EQUITY RESIDENTIAL
NYSE:EQR (11/21/2024, 8:24:59 PM)
After market: 75.05 0 (0%)75.05
+1.13 (+1.53%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap28.47B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.7% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.76 | ||
| Fwd PE | 44.06 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)7.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.42% | ||
| ROE | 8.52% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 30.47% | ||
| PM (TTM) | 31.45% | ||
| GM | 63.64% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.02 | ||
| Quick Ratio | 0.02 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)35.56%
EPS 3Y-3.52%
EPS 5Y
EPS Q2Q%
EPS Next Y-2.77%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.33%
Revenue growth 3Y3.77%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y