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Equity Lifestyle Properties Inc ELS

Morningstar Rating
$66.92 −0.40 (0.59%)
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Company Report

Equity Lifestyle Earnings: Slight FFO Beat Despite High Operating Expense Growth

Fourth-quarter results for no-moat Equity Lifestyle Properties were relatively in line with our expectations, giving us confidence in our $78 fair value estimate. Occupancy for the manufactured home portfolio held steady at 94.6% in the fourth quarter while rental rates per site were up 7.3% year over year, in line with our estimate of 7.4% rate growth for the segment. Rate growth for the recreational vehicle and marina segment was 3.9% in the fourth quarter as the annual membership component grew 8.3% but the seasonal and transient business declined 7.7%. As a result, core revenue increased 6.6% in the fourth quarter, which matched our estimate. Core operating expense grew 8.6%, slightly worse than our estimate of 6.4%, leading to same-store net operating income growth of 5.2%, slightly below our 6.3% estimate. However, other revenue was $2.4 million higher than we anticipated, so Equity Lifestyle reported normalized funds from operations of $0.71 per share in the fourth quarter, beating our $0.69 estimate and higher than the $0.64 reported in the fourth quarter of 2022.

Price vs Fair Value

ELS is trading at a 14% discount.
Price
$66.92
Fair Value
$54.00
Uncertainty
Medium
1-Star Price
$392.10
5-Star Price
$69.10
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Aging population supports rent and NOI growth at a spread above inflation.

Bears

Demand for the sector has already peaked and will flatten out as the target demographic turns 80, which will cause many to sell their residences as they instead move to senior housing facilities.

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News

Trading Information

Previous Close Price
$67.32
Day Range
$66.3667.26
52-Week Range
$60.4774.04
Bid/Ask
$54.66 / $81.41
Market Cap
$12.48 Bil
Volume/Avg
991,745 / 1.1 Mil

Key Statistics

Price/Earnings (Normalized)
38.76
Price/Sales
9.31
Dividend Yield (Trailing)
2.67%
Dividend Yield (Forward)
2.85%
Total Yield
2.67%

Company Profile

Equity Lifestyle Properties is a residential REIT that focuses on owning manufactured housing, residential vehicle communities, and marinas. The company currently has a portfolio of 450 properties across the U.S. with a higher concentration in the Sunbelt region with 34% of the company’s properties located in Florida, 11% in California, and 10% in Arizona. Equity Lifestyle targets owning properties in attractive retirement destinations with over 70% of the company’s properties either being age-restricted or having an average resident age over 55.
Sector
Real Estate
Industry
REIT - Residential
Stock Style Box
Mid Core
Total Number of Employees
4,000

Competitors

Valuation

Metric
ELS
SUI
Price/Earnings (Normalized)
38.7672.20
Price/Book Value
8.732.33
Price/Sales
9.315.17
Price/Cash Flow
22.5417.58
Price/Earnings
ELS
SUI

Financial Strength

Metric
ELS
SUI
Quick Ratio
0.090.18
Current Ratio
0.130.26
Interest Coverage
3.340.20
Quick Ratio
ELS
SUI

Profitability

Metric
ELS
SUI
Return on Assets (Normalized)
6.18%2.00%
Return on Equity (Normalized)
23.96%4.54%
Return on Invested Capital (Normalized)
8.90%4.07%
Return on Assets
ELS
SUI
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Economic Moat
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INVH
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SUI
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ESS
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MAA
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AMH
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UDR
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AIRC
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