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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Equity Residential (XNYS:EQR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
EQR
Name:
EQUITY RESIDENTIAL (XNYS:EQR)
Sector:
330.78M
Industry:
REIT�Residential
CEO:
Mr. Mark Parrell
Total Employees:
2,400
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 243.23% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF EQUITY RESIDENTIAL(EQR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND REIT�RESIDENTIAL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
73.8
One Month Price Target:
$74.15
Six Month Price Target :
$75.87
Likely Price in One Year's Time:
Ticker:
$77.95
Likely Trading Range Today Under (Normal Volatility)
$73.53
Price Upper limit ($) :
$74.09
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$70.41
This week:
$66.21
This month :
$58.62
Other Primary facts
Market Cap:
28.18B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
376.12M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.06%
-16.91%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$89.55
$82.38
$58.05
$65.22
Medium risk (<10%) entry points
Buy Call
Sell Call
$80.04
Buy Put:
Sell Put:
$78.51
$67.54
$69.09
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
EQR
Sharpe Ratio:
-0.01%
Comparison:
EQR, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -100.53% lower than the industry
& is -100.37% lower than the market/S&P 500 average
Average Returns/Yield of
EQR
Daily returns:
0.01%
Weekly returns:
0.04%
Monthly returns:
0.17%
Yearly returns:
13.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is -84.08% below industry average
Classification:
EQR, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.83
Statistical test of Returns:
EQR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.24%
Weekly Volatility:
5.02%
Monthly Volatility:
10.03%
Yearly Volatility:
34.75%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.18%
Volatility in last five trading days has been -47.30% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.60%
Weekly VaR:
-10.28%
Monthly VaR:
-20.56%
How Much Can the price of
EQR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-71.23%
This translates to price declining to:
$60.45
This translates to price declining to:
$21.23
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
EQR is a 45.13% riskier investment compared to the market/S&P 500 & is 24.33% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -8.53% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
EQR
Beta in relation to market/S&P 500--0.84
Expected beta in 1 year's time:
0.657
Expected beta in 3 year's time:
0.929
Unlevered (debt free) Beta:
0.472
Beta in relation to Nasdaq (XNAS):
0.616
Beta in relation to all global stocks::
0.738
Beta Comparison & Analysis
Beta of competitors/peers::
0.891
Beta is -6.12% lower than peers
Average Industry Beta:
0.785
Beta is 6.44% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
4.36%
Sustainable growth rate is -17.78% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.068
Alpha is -250.17% below industry average alpha yield
Alpha is -433% below the market average
Analysis of Cost of Capital of
EQR
Equity cost of capital:
0.089
Equity cost of capital is 4.06% above industry mean WACC
Unlevered (without debt) cost of capital:
5.01%
Before-tax cost of debt:
3.28%
After-tax cost of debt:
2.59%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.59%
WACC is 6.06% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$6.70
Revenue growth rate per share of (3Y):
2.41
Annual revenue growth rate is -182.42% below industry average
EPS:
$3.57
Expected Annual growth rate of EPS (3Y):
10.69%
Expected future EPS growth rate is 111.33% higher than the REIT�Residential industry
Free cash flow (FCF) per share:
$2.95
Balance sheet equity growth per share: 13.04%
Equity growth rate per share is -415.64% lower than the industry
Debt per share
$22.18
EBITDA per share
$6.66
Valuation Analysis Today of
EQR
P/E Ratio:
22.08
P/E Ratio of Competitors/Peers:
57.47
P/E ratio is -61.58% lower than main peers & is -66.71% lower than the industry
Stock price/value with industry average P/E ratio: $236.75
EQR is -68.83% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $53.01
Present value of the expected future dividends only: $31.45
P/S (Price to Sales ratio):
11.02
Price to sales ratio is -6.04% below the industry mean
P/B (Price to book value ratio):
2.41
Price to free cash flow: 24.99
Price to free cash flow ratio is -15.94% lower than the industry
Net income growth rate (3Y):
99.32%
Net income growth rate is -109.22% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 16.89%
Dividend yeild: 3.33%
Previous Dividend: $0.63
Previous adjusted dividend: $0.63
Previous Dividend: $2.46
Expected next dividend best case: $0.64
Expected next dividend worst case: $0.61
Average dividend payment (long-term): $0.60
Average dividend increase/decrease (growth rate) % per period: 0.99%
Expected next dividend payment date: 10/06/2022
Expected next dividend record date: 26/09/2022
Expected next dividend declaration date: 14/09/2022
Previous dividend payment date: 07/08/2022
Previous dividend record date: 27/06/2022
Previous dividend declaration date: 16/06/2022
Dividend History:
2022-06-24--$0.63
2021-12-31--$0.60
2021-06-25--$0.60
2022-03-25--$0.63
2021-09-24--$0.60
2021-03-26--$0.60
Dividend growth rate is -103.65% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
77.14%
Net debt to equity ratio:
77.96%
Debt to assets ratio:
40.04%
Net debt to assets ratio:
40.47%
Debt-to-asset ratio is -21.46% below industry average
Ability to repay debt:
Interest coverage ratio:
9.02
Interest coverage ratio is 244.71% more than industry average
Looking forward:
Debt growth rate:
3.35%
Annual debt growth is -175% lower than industry average debt growth rate
Debt repayment rate in last quarter: 16.19%
Analysis of Key Statistics
Correlation of price movement with the market:
0.646
Statistical significance of correlation:
EQR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.63
Stock price is 2.54% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.63
Correlation of price movement with Nasdaq (^IXIC):
0.07
Covariance of price movement with the market:
0.091
Kurtosis
9.642
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.007
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
EQR
Gross Profit Margin Ratio:
248%
Operating Profit Margin Ratio:
67.07%
Operating profit margin is 120.55% higher than the industry
Net Profit Margin Ratio:
248%
Effective Tax Rate:
0.07%
Effective tax rate is -94.47% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
12.45%
Return on equity (ROE) is 45.98% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
6.46%
Return on assets (ROA) is 84.21% higher than the industry
Financial Leverage:
1.7x
Current Ratio:
0.19
Current ratio is -97.97% below industry average
Cash Conversion Cycle (days):
-41.2
Cash conversion cycle is -389.34% below industry average
The remaining useful life of property plant & equipment is: 25.9 years
Stock based compensation to net income ratio:
0.68%
In-depth Efficiency Analysis
Revenue generated per employee:
1.0M
Each employee generates 30% more revenue than industry average revenue per employee
EBITDA generated per employee:
1.0M
Each employee generates 78% more EBITDA than industry average revenue per employee
Profit generated per employee:
560.9K
Each employee generates 154% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
137.8K
Each employee generates 85% more free cash flow than industry average revenue per employee
Assets/Capital per employee
8.6M
Each employee generates 85% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
EQR
ALEXANDRIA REAL ESTATE EQUITIES, INC. (XNYS:ARE)
AVALONBAY COMMUNITIES, INC. (XNYS:AVB)
CBRE GROUP, INC. (XNYS:CBRE)
NRZ-PC
WELLTOWER INC. (XNYS:WELL)
EXTRA SPACE STORAGE INC. (XNYS:EXR)
REALTY INCOME CORPORATION (XNYS:O)
INVITATION HOMES INC. (XNYS:INVH)
MID-AMERICA APARTMENT COMMUNITIES, INC. (XNYS:MAA)
Current Analyst Ratings
Strong buy�8%
Buy�8%
Hold�71%
Sell�13%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
2.52B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
958.45M
1.56B
-
58.36M
58.36M
-
868.27M
926.63M
28.98M
277.91M
881.47M
2.51B
1.69B
1.35B
1.41B
1.04M
1.35B
Statement of Cash Flow
Date:
Period:
233.01M
Differed Income Tax :
-
Stock Based Compensation :
9.20M
Change in Working Capital :
45.35M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
6.70M
Net Cash Provided by Operating Activities:
368.06M
Investments in PP&E:
- 971.00K
Net Acquisitions:
- 24897.00K
Purchases of Investments:
- 1009.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
41.14M
-
41.14M
-
-
70.56M
111.70M
471.67M
-
-
150.09M
-
20.10B
20.72B
-
20.83B
157.68M
130.00M
-
-
299.45M
587.13M
8.34B
371.17M
8.71B
-
9.30B
3.76M
1.66B
- 31847.0K
9.14B
March 31, 2022 at 6:00:00 AM
1.89B
10.81B
20.11B
-
8.47B
8.4B
3.43M
- 173594.00K
- 197037.00K
- 1611194.00K
-
-
- 227411.00K
1.42B
- 419555.00K
-
- 248536.00K
111.70M
360.24M
368.06M
- 37273.00K
330.78M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
EQR
2023
2024
2025
2026
2027
$78.34
$134.45
$142.01
$149.98
$158.41