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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Essex Property Trust, Inc. (XNYS:ESS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ESS
Name:
ESSEX PROPERTY TRUST, INC. (XNYS:ESS)
Sector:
290.23M
Industry:
REIT�Residential
CEO:
Mr. Michael Schall
Total Employees:
1,757
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -38.87% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ESSEX PROPERTY TRUST, INC.(ESS) 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 ($) :
265.98
One Month Price Target:
$267.18
Six Month Price Target :
$273.16
Likely Price in One Year's Time:
Ticker:
$280.35
Likely Trading Range Today Under (Normal Volatility)
$264.98
Price Upper limit ($) :
$267.01
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$253.73
This week:
$238.59
This month :
$211.2
Other Primary facts
Market Cap:
17.57B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
65.12M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.01%
-18.88%
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:
$322.86
$296.97
$209.10
$234.99
Medium risk (<10%) entry points
Buy Call
Sell Call
$288.54
Buy Put:
Sell Put:
$283.02
$243.34
$248.94
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ESS
Sharpe Ratio:
-0.14%
Comparison:
ESS, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -108.82% lower than the industry
& is -106.14% lower than the market/S&P 500 average
Average Returns/Yield of
ESS
Daily returns:
0.01%
Weekly returns:
0.03%
Monthly returns:
0.11%
Yearly returns:
13.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is -89.51% below industry average
Classification:
ESS, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.81
Statistical test of Returns:
ESS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.25%
Weekly Volatility:
5.02%
Monthly Volatility:
10.04%
Yearly Volatility:
34.78%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.10%
Volatility in last five trading days has been -50.96% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.61%
Weekly VaR:
-10.30%
Monthly VaR:
-20.60%
How Much Can the price of
ESS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-71.35%
This translates to price declining to:
$217.70
This translates to price declining to:
$76.20
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
ESS is a 45.37% riskier investment compared to the market/S&P 500 & is 24.54% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -8.43% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ESS
Beta in relation to market/S&P 500--0.80
Expected beta in 1 year's time:
0.593
Expected beta in 3 year's time:
0.838
Unlevered (debt free) Beta:
0.406
Beta in relation to Nasdaq (XNAS):
0.641
Beta in relation to all global stocks::
0.737
Beta Comparison & Analysis
Beta of competitors/peers::
0.875
Beta is -8.13% lower than peers
Average Industry Beta:
0.785
Beta is 2.33% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.073
Alpha is -260.95% below industry average alpha yield
Alpha is -464% below the market average
Analysis of Cost of Capital of
ESS
Equity cost of capital:
0.087
Equity cost of capital is 1.47% above industry mean WACC
Unlevered (without debt) cost of capital:
4.37%
Before-tax cost of debt:
3.38%
After-tax cost of debt:
2.67%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.67%
WACC is -2.83% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$22.53
Revenue growth rate per share of (3Y):
2.8
Annual revenue growth rate is -47.89% below industry average
EPS:
$6.04
Expected Annual growth rate of EPS (3Y):
4.03%
Expected future EPS growth rate is -20.30% lower than the REIT�Residential industry
Free cash flow (FCF) per share:
$1.67
Balance sheet equity growth per share: 13.12%
Equity growth rate per share is -417.75% lower than the industry
Debt per share
$92.38
EBITDA per share
$17.47
Valuation Analysis Today of
ESS
P/E Ratio:
44.98
P/E Ratio of Competitors/Peers:
159.86
P/E ratio is -71.86% lower than main peers & is -32.17% lower than the industry
Stock price/value with industry average P/E ratio: $400.55
ESS is -33.60% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $140.91
Present value of the expected future dividends only: $117.14
P/S (Price to Sales ratio):
11.8
Price to sales ratio is 0.69% above the industry mean
P/B (Price to book value ratio):
2.8
Price to free cash flow: 158.94
-
Net income growth rate (3Y):
26.34%
Net income growth rate is -102.45% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 34.67%
Dividend yeild: 3.23%
Previous Dividend: $2.20
Previous adjusted dividend: $2.20
Previous Dividend: $8.58
Expected next dividend best case: $2.26
Expected next dividend worst case: $2.14
Average dividend payment (long-term): $2.09
Average dividend increase/decrease (growth rate) % per period: 1.24%
Expected next dividend payment date: 13/10/2022
Expected next dividend record date: 28/09/2022
-
Previous dividend payment date: 15/07/2022
Previous dividend record date: 30/06/2022
-
Dividend History:
2022-06-29--$2.20
2021-12-31--$2.09
2021-06-29--$2.09
2022-03-30--$2.20
2021-09-29--$2.09
2021-03-30--$2.09
Dividend growth rate is -104.58% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
101.00%
Net debt to equity ratio:
101.00%
Debt to assets ratio:
47.11%
Net debt to assets ratio:
47.11%
Debt-to-asset ratio is -7.59% below industry average
Ability to repay debt:
Interest coverage ratio:
5.5
Interest coverage ratio is 110.26% more than industry average
Looking forward:
Debt growth rate:
0.51%
Annual debt growth is -112% lower than industry average debt growth rate
Debt repayment rate in last quarter: 9.56%
Analysis of Key Statistics
Correlation of price movement with the market:
0.657
Statistical significance of correlation:
ESS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.63
Stock price is 4.25% 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):
0.059
Covariance of price movement with the market:
0.077
Kurtosis
11.524
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:
-0.663
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
ESS
Gross Profit Margin Ratio:
267%
Operating Profit Margin Ratio:
30.15%
Operating profit margin is -0.84% lower than the industry
Net Profit Margin Ratio:
267%
Effective Tax Rate:
2.89%
Effective tax rate is 116.43% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
6.60%
Return on equity (ROE) is -22.56% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.08%
Return on assets (ROA) is -12.19% lower than the industry
Financial Leverage:
1.9x
Current Ratio:
1.07
Current ratio is -88.61% below industry average
Cash Conversion Cycle (days):
86.4
Cash conversion cycle is 507.32% above industry average
The remaining useful life of property plant & equipment is: 5.2 years
Stock based compensation to net income ratio:
0.58%
In-depth Efficiency Analysis
Revenue generated per employee:
835.1K
Each employee generates 3% more revenue than industry average revenue per employee
EBITDA generated per employee:
647.4K
Each employee generates 10% more EBITDA than industry average revenue per employee
Profit generated per employee:
223.9K
Each employee generates 2% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
165.2K
Each employee generates 122% more free cash flow than industry average revenue per employee
Assets/Capital per employee
7.0M
Each employee generates 122% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
ESS
SUN COMMUNITIES, INC. (XNYS:SUI)
DUKE REALTY CORPORATION (XNYS:DRE)
VENTAS, INC. (XNYS:VTR)
MID-AMERICA APARTMENT COMMUNITIES, INC. (XNYS:MAA)
BOSTON PROPERTIES, INC. (XNYS:BXP)
HEALTHPEAK PROPERTIES, INC. (XNYS:PEAK)
INVITATION HOMES INC. (XNYS:INVH)
UDR, INC. (XNYS:UDR)
VICI PROPERTIES INC. (XNYS:VICI)
Current Analyst Ratings
Strong buy�8%
Buy�25%
Hold�67%
Sell�4%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.47B
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:
488.29M
979.04M
-
54.27M
54.27M
-
525.01M
579.28M
89.14M
206.78M
525.01M
1.14B
442.46M
393.36M
429.52M
12.41M
393.36M
Statement of Cash Flow
Date:
Period:
133.53M
Differed Income Tax :
-
Stock Based Compensation :
2.30M
Change in Working Capital :
57.06M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
43.88M
Net Cash Provided by Operating Activities:
315.14M
Investments in PP&E:
-
Net Acquisitions:
- 79284.00K
Purchases of Investments:
- 10826.00K
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
98.11M
169.70M
267.81M
205.42M
-
67.04M
540.27M
68.16M
-
-
1.14B
-
11.02B
12.23B
-
12.77B
221.93M
98.00M
-
-
186.46M
506.39M
6.02B
69.55M
6.09B
-
6.59B
7.00K
- 987333.00K
14.2M
-
March 31, 2022 at 6:00:00 AM
1.07B
5.96B
12.55B
1.31B
6.11B
6.0B
27.91M
167.92M
105.72M
- 635633.00K
-
- 141.00K
- 136392.00K
401.22M
- 370946.00K
-
49.92M
108.55M
58.64M
315.14M
- 24917.00K
290.23M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
ESS
2023
2024
2025
2026
2027
$281.75
$523.86
$552.15
$581.97
$613.40