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Equity Residential EQR

Morningstar Rating
$60.74 +0.53 (0.88%)
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Company Report

Equity Residential Should See Low but Steady Revenue Growth Over the Long Term

Equity Residential has repositioned its portfolio over the past decade to focus on owning and operating high-quality multifamily buildings in urban, coastal markets with demographics that allow the company to maintain high occupancies and drive strong rent growth. The company has sold out of inland and southern markets and increased its operations in high-growth core markets: Los Angeles, San Diego, San Francisco, Washington, D.C., New York, Boston, and Seattle. These markets exhibit traits that create demand for apartments, like job growth, income growth, decreasing homeownership rates, high relative cost of single-family housing, and attractive urban centers that draw younger people. The company regularly recycles capital by selling noncore assets or exiting markets and using the proceeds for its development pipeline or acquisitions, a strategy that has produced strong returns.

Price vs Fair Value

EQR is trading at a 23% discount.
Price
$60.74
Fair Value
$43.00
Uncertainty
Medium
1-Star Price
$363.65
5-Star Price
$61.90
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Equity Residential's portfolio of high quality assets should see relatively consistent levels of demand long term from high-income earners and will likely see just a small hit to fundamentals during the current pandemic as most residents have not experienced job losses.

Bears

The pandemic has made many millennials consider alternatives to urban apartments, including suburban apartments and single-family homeownership. This demographic has put off many major adult milestones but may finally be making the shift toward the suburbs.

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News

Trading Information

Previous Close Price
$60.21
Day Range
$59.1960.77
52-Week Range
$52.5769.45
Bid/Ask
$58.03 / $63.00
Market Cap
$23.05 Bil
Volume/Avg
3.1 Mil / 2.2 Mil

Key Statistics

Price/Earnings (Normalized)
39.05
Price/Sales
8.26
Dividend Yield (Trailing)
4.36%
Dividend Yield (Forward)
4.36%
Total Yield
4.58%

Company Profile

Equity Residential owns a portfolio of 302 apartment communities with around 80,000 units and is developing two additional properties with 537 units. The company focuses on owning large, high-quality properties in the urban and suburban submarkets of Southern California, San Francisco, Washington, D.C., New York, Seattle, and Boston.
Sector
Real Estate
Industry
REIT - Residential
Stock Style Box
Mid Core
Total Number of Employees
2,400

Competitors

Valuation

Metric
EQR
AIRC
AVB
Price/Earnings (Normalized)
39.057.1036.35
Price/Book Value
2.091.902.15
Price/Sales
8.265.659.12
Price/Cash Flow
15.5111.6716.36
Price/Earnings
EQR
AIRC
AVB

Financial Strength

Metric
EQR
AIRC
AVB
Quick Ratio
0.060.460.57
Current Ratio
0.170.530.76
Interest Coverage
4.166.275.56
Quick Ratio
EQR
AIRC
AVB

Profitability

Metric
EQR
AIRC
AVB
Return on Assets (Normalized)
4.44%10.92%4.86%
Return on Equity (Normalized)
8.07%31.64%8.64%
Return on Invested Capital (Normalized)
5.89%13.79%6.08%
Return on Assets
EQR
AIRC
AVB
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REIT - Residential Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
AVB
AvalonBay Communities IncRwgb$25.3 Bil
INVH
Invitation Homes IncNtdml$21.1 Bil
SUI
Sun Communities IncDmxbd$16.5 Bil
ESS
Essex Property Trust IncHfwf$15.0 Bil
MAA
Mid-America Apartment Communities IncGgwp$14.9 Bil
AMH
American Homes 4 Rent Class ALvsy$13.5 Bil
ELS
Equity Lifestyle Properties IncQqjgp$12.5 Bil
UDR
UDR IncKyt$11.8 Bil
AIRC
Apartment Income REIT Corp Class AJnhhg$4.5 Bil

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