EQUITY RESIDENTIAL (EQR) Stock Fundamental Analysis
USA - NYSE:EQR - US29476L1070 - REIT
62.35 USD
+0.14 (+0.23%)
62.35 USD
0 (0%)
EQR gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 20 industry peers in the Residential REITs industry. EQR scores excellent on profitability, but there are concerns on its financial health. EQR does not seem to be growing, but still is valued expensively.
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.
EQR had positive earnings in each of the past 5 years.
Each year in the past 5 years EQR had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.80%, EQR is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
Looking at the Return On Equity, with a value of 9.18%, EQR is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
EQR has a better Return On Invested Capital (3.35%) than 80.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for EQR is in line with the industry average of 2.59%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.8% | ||
| ROE | 9.18% | ||
| ROIC | 3.35% |
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 Profit Margin of 33.17%. This is amongst the best in the industry. EQR outperforms 85.00% of its industry peers.
EQR's Profit Margin has been stable in the last couple of years.
EQR has a better Operating Margin (28.12%) than 80.00% of its industry peers.
EQR's Operating Margin has declined in the last couple of years.
The Gross Margin of EQR (63.05%) is better than 90.00% 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 | 28.12% | ||
| PM (TTM) | 33.17% | ||
| GM | 63.05% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so EQR is destroying value.
Compared to 1 year ago, EQR has about the same amount of shares outstanding.
EQR has more shares outstanding than it did 5 years ago.
EQR has a worse debt/assets ratio than last year.
2.2 Solvency
EQR has an Altman-Z score of 1.70. This is a bad value and indicates that EQR is not financially healthy and even has some risk of bankruptcy.
With an excellent Altman-Z score value of 1.70, EQR belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
A Debt/Equity ratio of 0.76 indicates that EQR is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.76, EQR is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.7 |
ROIC/WACC0.47
WACC7.12%
2.3 Liquidity
EQR has a Current Ratio of 0.03. 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 worse Current ratio (0.03) than 90.00% of its industry peers.
A Quick Ratio of 0.03 indicates that EQR may have some problems paying its short term obligations.
EQR has a Quick ratio of 0.03. This is amonst the worse of the industry: EQR underperforms 90.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.03 | ||
| Quick Ratio | 0.03 |
3. Growth
3.1 Past
EQR shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.58%.
Measured over the past 5 years, EQR shows a small growth in Earnings Per Share. The EPS has been growing by 0.98% on average per year.
EQR shows a small growth in Revenue. In the last year, the Revenue has grown by 4.40%.
The Revenue has been growing slightly by 1.99% on average over the past years.
EPS 1Y (TTM)5.58%
EPS 3Y-8.41%
EPS 5Y0.98%
EPS Q2Q%6.38%
Revenue 1Y (TTM)4.4%
Revenue growth 3Y6.54%
Revenue growth 5Y1.99%
Sales Q2Q%4.72%
3.2 Future
The Earnings Per Share is expected to decrease by -9.78% on average over the next years.
EQR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.80% yearly.
EPS Next Y-29.71%
EPS Next 2Y-26.19%
EPS Next 3Y-15.5%
EPS Next 5Y-9.78%
Revenue Next Year4.41%
Revenue Next 2Y4.12%
Revenue Next 3Y4.02%
Revenue Next 5Y4.8%
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
A Price/Earnings ratio of 23.53 indicates a rather expensive valuation of EQR.
90.00% of the companies in the same industry are more expensive than EQR, based on the Price/Earnings ratio.
EQR's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.69.
The Price/Forward Earnings ratio is 42.08, which means the current valuation is very expensive for EQR.
75.00% of the companies in the same industry are more expensive than EQR, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.18. EQR is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.53 | ||
| Fwd PE | 42.08 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of EQR indicates a somewhat cheap valuation: EQR is cheaper than 70.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 16.88 |
4.3 Compensation for Growth
EQR has a very decent profitability rating, which may justify a higher PE ratio.
EQR's earnings are expected to decrease with -15.50% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)23.9
EPS Next 2Y-26.19%
EPS Next 3Y-15.5%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.50%, EQR is a good candidate for dividend investing.
EQR's Dividend Yield is comparable with the industry average which is at 7.17.
Compared to an average S&P500 Dividend Yield of 2.34, EQR pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.5% |
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
102.28% 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.
DP102.28%
EPS Next 2Y-26.19%
EPS Next 3Y-15.5%
62.35
+0.14 (+0.23%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners94.18%
Inst Owner Change-0.05%
Ins Owners0.52%
Ins Owner Change2.34%
Market Cap23.81B
Analysts71.72
Price Target75.61 (21.27%)
Short Float %1.43%
Short Ratio2.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.5% |
Yearly Dividend2.69
Dividend Growth(5Y)3.64%
DP102.28%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)79.82%
Min EPS beat(2)35.13%
Max EPS beat(2)124.52%
EPS beat(4)3
Avg EPS beat(4)77.31%
Min EPS beat(4)-10.24%
Max EPS beat(4)159.82%
EPS beat(8)7
Avg EPS beat(8)70.17%
EPS beat(12)10
Avg EPS beat(12)64.86%
EPS beat(16)13
Avg EPS beat(16)79.94%
Revenue beat(2)0
Avg Revenue beat(2)-1.49%
Min Revenue beat(2)-1.81%
Max Revenue beat(2)-1.17%
Revenue beat(4)1
Avg Revenue beat(4)-0.74%
Min Revenue beat(4)-1.81%
Max Revenue beat(4)0.43%
Revenue beat(8)1
Avg Revenue beat(8)-0.81%
Revenue beat(12)1
Avg Revenue beat(12)-0.87%
Revenue beat(16)4
Avg Revenue beat(16)-0.51%
PT rev (1m)-0.14%
PT rev (3m)-3.49%
EPS NQ rev (1m)1.62%
EPS NQ rev (3m)30.57%
EPS NY rev (1m)1.59%
EPS NY rev (3m)20.92%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)-0.13%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)-0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.53 | ||
| Fwd PE | 42.08 | ||
| P/S | 7.82 | ||
| P/FCF | N/A | ||
| P/OCF | 15.45 | ||
| P/B | 2.16 | ||
| P/tB | 2.16 | ||
| EV/EBITDA | 16.88 |
EPS(TTM)2.65
EY4.25%
EPS(NY)1.48
Fwd EY2.38%
FCF(TTM)-2.5
FCFYN/A
OCF(TTM)4.03
OCFY6.47%
SpS7.97
BVpS28.82
TBVpS28.82
PEG (NY)N/A
PEG (5Y)23.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.8% | ||
| ROE | 9.18% | ||
| ROCE | 4.41% | ||
| ROIC | 3.35% | ||
| ROICexc | 3.36% | ||
| ROICexgc | 3.4% | ||
| OM | 28.12% | ||
| PM (TTM) | 33.17% | ||
| GM | 63.05% | ||
| 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)3.49%
ROICexgc(5y)3.23%
ROCE(3y)4.43%
ROCE(5y)4.09%
ROICexcg growth 3Y12.84%
ROICexcg growth 5Y-0.45%
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-Score3
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 4.51 | ||
| Cap/Depr | 249.68% | ||
| Cap/Sales | 81.98% | ||
| Interest Coverage | 3.37 | ||
| Cash Conversion | 83.02% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.03 | ||
| Quick Ratio | 0.03 | ||
| Altman-Z | 1.7 |
F-Score3
WACC7.12%
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)5.58%
EPS 3Y-8.41%
EPS 5Y0.98%
EPS Q2Q%6.38%
EPS Next Y-29.71%
EPS Next 2Y-26.19%
EPS Next 3Y-15.5%
EPS Next 5Y-9.78%
Revenue 1Y (TTM)4.4%
Revenue growth 3Y6.54%
Revenue growth 5Y1.99%
Sales Q2Q%4.72%
Revenue Next Year4.41%
Revenue Next 2Y4.12%
Revenue Next 3Y4.02%
Revenue Next 5Y4.8%
EBIT growth 1Y-4.68%
EBIT growth 3Y12%
EBIT growth 5Y-0.83%
EBIT Next Year104.14%
EBIT Next 3Y29.79%
EBIT Next 5Y18.75%
FCF growth 1Y-201.06%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y2.04%
OCF growth 3Y7.68%
OCF growth 5Y1.55%