Analyzing Equity Residential (EQR) & The Competition

Equity Residential (NYSE: EQR) is one of 45 public companies in the “Residential REITs” industry, but how does it contrast to its peers? We will compare Equity Residential to similar businesses based on the strength of its risk, analyst recommendations, institutional ownership, profitability, earnings, valuation and dividends.

Profitability

This table compares Equity Residential and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equity Residential 30.88% 7.22% 3.66%
Equity Residential Competitors 25.71% 5.41% 2.03%

Valuation and Earnings

This table compares Equity Residential and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Equity Residential $2.43 billion $4.29 billion 33.95
Equity Residential Competitors $721.30 million $355.95 million -38.48

Equity Residential has higher revenue and earnings than its peers. Equity Residential is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of current recommendations for Equity Residential and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equity Residential 1 9 4 0 2.21
Equity Residential Competitors 187 1229 1283 31 2.42

Equity Residential currently has a consensus price target of $69.15, indicating a potential downside of 0.14%. As a group, “Residential REITs” companies have a potential upside of 23.41%. Given Equity Residential’s peers stronger consensus rating and higher possible upside, analysts clearly believe Equity Residential has less favorable growth aspects than its peers.

Insider & Institutional Ownership

91.0% of Equity Residential shares are owned by institutional investors. Comparatively, 77.0% of shares of all “Residential REITs” companies are owned by institutional investors. 3.8% of Equity Residential shares are owned by company insiders. Comparatively, 7.1% of shares of all “Residential REITs” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Equity Residential pays an annual dividend of $2.02 per share and has a dividend yield of 2.9%. Equity Residential pays out 99.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Residential REITs” companies pay a dividend yield of 3.5% and pay out 158.8% of their earnings in the form of a dividend.

Volatility & Risk

Equity Residential has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, Equity Residential’s peers have a beta of 1.44, indicating that their average stock price is 44% more volatile than the S&P 500.

Summary

Equity Residential beats its peers on 8 of the 15 factors compared.

Equity Residential Company Profile

Equity Residential is a real estate investment trust. The Company’s primary business is the acquisition, development and management of multifamily residential properties. Its segments include Boston, New York, Washington D.C., Southern California, San Francisco, Seattle and Other Markets. Southern California includes Los Angeles, San Diego and Orange County. Other Markets includes Phoenix. It is engaged in leasing of apartment units to residents. It focuses on rental apartment properties in urban and high-density suburban coastal gateway markets. As of December 31, 2016, the Company owned 302 properties located in 10 states and the District of Columbia consisting of 77,458 apartment units. The Company’s projects include The Alton, 455 Eye Street, 855 Brannan, Cascade, One Henry Adams, 340 Fremont and Vista 99. ERP Operating Limited Partnership (ERPOP) conducts the multifamily residential property business of Equity Residential.

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