ESSEX PROPERTY TRUST INC (ESS) Stock Fundamental Analysis
NYSE:ESS - New York Stock Exchange, Inc. - US2971781057 - REIT - Currency: USD
Taking everything into account, ESS scores 4 out of 10 in our fundamental rating. ESS was compared to 20 industry peers in the Residential REITs industry. ESS scores excellent on profitability, but there are concerns on its financial health. ESS is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
ESS had positive earnings in the past year.
ESS had a positive operating cash flow in the past year.
ESS had positive earnings in each of the past 5 years.
Of the past 5 years ESS 4 years had a positive operating cash flow.
1.2 Ratios
ESS has a better Return On Assets (4.34%) than 80.00% of its industry peers.
ESS has a better Return On Equity (10.11%) than 90.00% of its industry peers.
ESS's Return On Invested Capital of 3.44% is fine compared to the rest of the industry. ESS outperforms 80.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ESS is in line with the industry average of 2.61%.
The last Return On Invested Capital (3.44%) for ESS is above the 3 year average (3.35%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.34% | ||
| ROE | 10.11% | ||
| ROIC | 3.44% |
ROA(3y)4.11%
ROA(5y)4.1%
ROE(3y)9.34%
ROE(5y)9.13%
ROIC(3y)3.35%
ROIC(5y)3.04%
1.3 Margins
The Profit Margin of ESS (31.55%) is better than 90.00% of its industry peers.
ESS's Profit Margin has improved in the last couple of years.
ESS has a Operating Margin of 30.39%. This is amongst the best in the industry. ESS outperforms 85.00% of its industry peers.
In the last couple of years the Operating Margin of ESS has declined.
With an excellent Gross Margin value of 70.83%, ESS belongs to the best of the industry, outperforming 95.00% of the companies in the same industry.
In the last couple of years the Gross Margin of ESS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.39% | ||
| PM (TTM) | 31.55% | ||
| GM | 70.83% |
OM growth 3Y3.42%
OM growth 5Y-2.45%
PM growth 3Y7.21%
PM growth 5Y6.79%
GM growth 3Y0.78%
GM growth 5Y-0.57%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ESS is destroying value.
ESS has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, ESS has less shares outstanding
ESS has a worse debt/assets ratio than last year.
2.2 Solvency
ESS has an Altman-Z score of 1.68. This is a bad value and indicates that ESS is not financially healthy and even has some risk of bankruptcy.
With a decent Altman-Z score value of 1.68, ESS is doing good in the industry, outperforming 75.00% of the companies in the same industry.
The Debt to FCF ratio of ESS is 42.01, which is on the high side as it means it would take ESS, 42.01 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 42.01, ESS is in line with its industry, outperforming 55.00% of the companies in the same industry.
A Debt/Equity ratio of 1.17 is on the high side and indicates that ESS has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.17, ESS is in line with its industry, outperforming 45.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.17 | ||
| Debt/FCF | 42.01 | ||
| Altman-Z | 1.68 |
ROIC/WACC0.46
WACC7.51%
2.3 Liquidity
A Current Ratio of 0.40 indicates that ESS may have some problems paying its short term obligations.
The Current ratio of ESS (0.40) is comparable to the rest of the industry.
ESS has a Quick Ratio of 0.40. This is a bad value and indicates that ESS is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.35, ESS is in line with its industry, outperforming 50.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.4 | ||
| Quick Ratio | 0.35 |
3. Growth
3.1 Past
ESS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 39.62%, which is quite impressive.
ESS shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.66% yearly.
Looking at the last year, ESS shows a small growth in Revenue. The Revenue has grown by 6.29% in the last year.
The Revenue has been growing slightly by 3.98% on average over the past years.
EPS 1Y (TTM)39.62%
EPS 3Y5.47%
EPS 5Y5.66%
EPS Q2Q%24.51%
Revenue 1Y (TTM)6.29%
Revenue growth 3Y7.2%
Revenue growth 5Y3.98%
Sales Q2Q%7.19%
3.2 Future
ESS is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -2.51% yearly.
The Revenue is expected to grow by 3.17% on average over the next years.
EPS Next Y-31.39%
EPS Next 2Y-14.26%
EPS Next 3Y-5.48%
EPS Next 5Y-2.51%
Revenue Next Year5.51%
Revenue Next 2Y4.7%
Revenue Next 3Y4.7%
Revenue Next 5Y3.17%
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 33.46, which means the current valuation is very expensive for ESS.
Based on the Price/Earnings ratio, ESS is valued a bit cheaper than 75.00% of the companies in the same industry.
ESS's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 29.63.
Based on the Price/Forward Earnings ratio of 48.76, the valuation of ESS can be described as expensive.
70.00% of the companies in the same industry are more expensive than ESS, based on the Price/Forward Earnings ratio.
ESS is valuated expensively when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.46 | ||
| Fwd PE | 48.76 |
4.2 Price Multiples
75.00% of the companies in the same industry are cheaper than ESS, based on the Enterprise Value to EBITDA ratio.
ESS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 125 | ||
| EV/EBITDA | 22.96 |
4.3 Compensation for Growth
The excellent profitability rating of ESS may justify a higher PE ratio.
ESS's earnings are expected to decrease with -5.48% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)5.91
EPS Next 2Y-14.26%
EPS Next 3Y-5.48%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.33%, ESS has a reasonable but not impressive dividend return.
ESS's Dividend Yield is slightly below the industry average, which is at 4.25.
Compared to an average S&P500 Dividend Yield of 2.27, ESS pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.33% |
5.2 History
The dividend of ESS has a limited annual growth rate of 3.57%.
ESS has paid a dividend for at least 10 years, which is a reliable track record.
ESS has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)3.57%
Div Incr Years29
Div Non Decr Years29
5.3 Sustainability
ESS pays out 111.25% of its income as dividend. This is not a sustainable payout ratio.
ESS's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP111.25%
EPS Next 2Y-14.26%
EPS Next 3Y-5.48%
294.74
+0.33 (+0.11%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryResidential REITs
Earnings (Last)
Earnings (Next)
Inst Owners96.96%
Inst Owner Change-90.91%
Ins Owners1.11%
Ins Owner Change2%
Market Cap18.94B
Analysts66.45
Price Target314.63 (6.75%)
Short Float %1.57%
Short Ratio2.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.33% |
Yearly Dividend9.11
Dividend Growth(5Y)3.57%
DP111.25%
Div Incr Years29
Div Non Decr Years29
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)19.58%
Min EPS beat(2)6.19%
Max EPS beat(2)32.98%
EPS beat(4)3
Avg EPS beat(4)58.42%
Min EPS beat(4)-30.66%
Max EPS beat(4)225.19%
EPS beat(8)6
Avg EPS beat(8)52.2%
EPS beat(12)8
Avg EPS beat(12)39.52%
EPS beat(16)12
Avg EPS beat(16)48.69%
Revenue beat(2)1
Avg Revenue beat(2)0.58%
Min Revenue beat(2)-0.27%
Max Revenue beat(2)1.43%
Revenue beat(4)2
Avg Revenue beat(4)0.24%
Min Revenue beat(4)-0.52%
Max Revenue beat(4)1.43%
Revenue beat(8)2
Avg Revenue beat(8)-0.39%
Revenue beat(12)5
Avg Revenue beat(12)-0.06%
Revenue beat(16)6
Avg Revenue beat(16)-0.22%
PT rev (1m)0.57%
PT rev (3m)2.26%
EPS NQ rev (1m)-0.46%
EPS NQ rev (3m)-0.46%
EPS NY rev (1m)-0.19%
EPS NY rev (3m)-0.52%
Revenue NQ rev (1m)0.65%
Revenue NQ rev (3m)0.65%
Revenue NY rev (1m)0.48%
Revenue NY rev (3m)1.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.46 | ||
| Fwd PE | 48.76 | ||
| P/S | 10.88 | ||
| P/FCF | 125 | ||
| P/OCF | 17.98 | ||
| P/B | 3.49 | ||
| P/tB | 3.49 | ||
| EV/EBITDA | 22.96 |
EPS(TTM)8.81
EY2.99%
EPS(NY)6.04
Fwd EY2.05%
FCF(TTM)2.36
FCFY0.8%
OCF(TTM)16.39
OCFY5.56%
SpS27.1
BVpS84.55
TBVpS84.55
PEG (NY)N/A
PEG (5Y)5.91
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.34% | ||
| ROE | 10.11% | ||
| ROCE | 4.35% | ||
| ROIC | 3.44% | ||
| ROICexc | 3.46% | ||
| ROICexgc | 3.46% | ||
| OM | 30.39% | ||
| PM (TTM) | 31.55% | ||
| GM | 70.83% | ||
| FCFM | 8.7% |
ROA(3y)4.11%
ROA(5y)4.1%
ROE(3y)9.34%
ROE(5y)9.13%
ROIC(3y)3.35%
ROIC(5y)3.04%
ROICexc(3y)3.4%
ROICexc(5y)3.07%
ROICexgc(3y)3.4%
ROICexgc(5y)3.07%
ROCE(3y)4.24%
ROCE(5y)3.84%
ROICexcg growth 3Y10.07%
ROICexcg growth 5Y0.49%
ROICexc growth 3Y10.07%
ROICexc growth 5Y0.49%
OM growth 3Y3.42%
OM growth 5Y-2.45%
PM growth 3Y7.21%
PM growth 5Y6.79%
GM growth 3Y0.78%
GM growth 5Y-0.57%
F-Score5
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.17 | ||
| Debt/FCF | 42.01 | ||
| Debt/EBITDA | 5.79 | ||
| Cap/Depr | 158.32% | ||
| Cap/Sales | 51.79% | ||
| Interest Coverage | 2.5 | ||
| Cash Conversion | 95.87% | ||
| Profit Quality | 27.58% | ||
| Current Ratio | 0.4 | ||
| Quick Ratio | 0.35 | ||
| Altman-Z | 1.68 |
F-Score5
WACC7.51%
ROIC/WACC0.46
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)39.62%
EPS 3Y5.47%
EPS 5Y5.66%
EPS Q2Q%24.51%
EPS Next Y-31.39%
EPS Next 2Y-14.26%
EPS Next 3Y-5.48%
EPS Next 5Y-2.51%
Revenue 1Y (TTM)6.29%
Revenue growth 3Y7.2%
Revenue growth 5Y3.98%
Sales Q2Q%7.19%
Revenue Next Year5.51%
Revenue Next 2Y4.7%
Revenue Next 3Y4.7%
Revenue Next 5Y3.17%
EBIT growth 1Y-0.37%
EBIT growth 3Y10.86%
EBIT growth 5Y1.43%
EBIT Next Year131.06%
EBIT Next 3Y36.3%
EBIT Next 5Y26.8%
FCF growth 1Y-77.48%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y11.7%
OCF growth 3YN/A
OCF growth 5YN/A