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Essex Property Trust Inc ESS

Morningstar Rating
$229.34 −0.61 (0.27%)
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Company Report

Essex Property Trust Earnings: Rent Growth Slowing While Expense Growth Remains Elevated

Essex Property Trust reported results for the fourth quarter that were generally in line with our expectations for the quarter, leading us to reaffirm our $305 fair value estimate. Same-store occupancy declined 30 basis points sequentially to 96.1%, below our estimate of occupancies remaining flat. Average rental rates were up just 2.4% year over year, though that is slightly better than our estimate of 1.9% growth. As a result, same-store revenues grew 2.9% in the quarter, in line with our estimate. However, same-store operating expenses were up 4.5% in the fourth quarter, leading to same-store net operating income growth of just 2.3%. Essex reported core funds from operations of $3.83 per share for the fourth quarter, slightly below our $3.96 estimate mainly due to a one-time impairment charge in the unconsolidated portfolio. Excluding that charge, core FFO results were in line with our expectations.

Price vs Fair Value

ESS is trading within a range we consider fairly valued.
Price
$229.34
Fair Value
$652.00
Uncertainty
Medium
1-Star Price
$583.21
5-Star Price
$157.70
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Essex’s portfolio benefits from strong job and income growth and limited supply growth in its attractive West Coast markets.

Bears

The pandemic has made 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
$229.95
Day Range
$227.87230.51
52-Week Range
$195.03252.85
Bid/Ask
$219.01 / $304.99
Market Cap
$14.72 Bil
Volume/Avg
917,327 / 448,947

Key Statistics

Price/Earnings (Normalized)
40.02
Price/Sales
8.75
Dividend Yield (Trailing)
4.03%
Dividend Yield (Forward)
4.27%
Total Yield
4.68%

Company Profile

Essex Property Trust owns a portfolio of 252 apartment communities with over 62,000 units and is developing another property with 264 units. The company focuses on owning large, high-quality properties on the West Coast in the urban and suburban submarkets of Southern California, Northern California, and Seattle.
Sector
Real Estate
Industry
REIT - Residential
Stock Style Box
Mid Core
Total Number of Employees
1,750

Competitors

Valuation

Metric
ESS
AIRC
EQR
Price/Earnings (Normalized)
40.0239.00
Price/Book Value
2.691.932.01
Price/Sales
8.755.767.98
Price/Cash Flow
15.2711.7115.01
Price/Earnings
ESS
AIRC
EQR

Financial Strength

Metric
ESS
AIRC
EQR
Quick Ratio
1.850.460.06
Current Ratio
1.880.530.17
Interest Coverage
2.816.274.16
Quick Ratio
ESS
AIRC
EQR

Profitability

Metric
ESS
AIRC
EQR
Return on Assets (Normalized)
3.10%10.92%4.44%
Return on Equity (Normalized)
6.87%31.64%8.07%
Return on Invested Capital (Normalized)
4.33%13.79%5.89%
Return on Assets
ESS
AIRC
EQR
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REIT - Residential Industry Comparables

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Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
AVB
AvalonBay Communities IncTmyfm$24.9 Bil
EQR
Equity ResidentialShvwj$22.8 Bil
INVH
Invitation Homes IncDff$20.4 Bil
SUI
Sun Communities IncBffr$16.3 Bil
MAA
Mid-America Apartment Communities IncZknd$14.7 Bil
AMH
American Homes 4 Rent Class ALcxr$12.9 Bil
ELS
Equity Lifestyle Properties IncNrt$12.5 Bil
UDR
UDR IncJcql$11.8 Bil
AIRC
Apartment Income REIT Corp Class ACvr$4.5 Bil

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