Equity Residential (NYSE: EQR) and Home Properties (NYSE:HME) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.
Institutional & Insider Ownership
91.1% of Equity Residential shares are owned by institutional investors. 3.8% of Equity Residential shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares Equity Residential and Home Properties’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings and target prices for Equity Residential and Home Properties, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Equity Residential presently has a consensus price target of $67.64, suggesting a potential upside of 1.75%. Given Equity Residential’s higher probable upside, analysts plainly believe Equity Residential is more favorable than Home Properties.
Equity Residential pays an annual dividend of $2.02 per share and has a dividend yield of 3.0%. Home Properties does not pay a dividend. Equity Residential pays out 90.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Home Properties has increased its dividend for 6 consecutive years.
Earnings & Valuation
This table compares Equity Residential and Home Properties’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Equity Residential||$2.43 billion||10.05||$1.57 billion||$2.23||29.81|
Equity Residential has higher revenue and earnings than Home Properties.
Equity Residential beats Home Properties on 9 of the 11 factors compared between the two stocks.
About Equity Residential
Equity Residential is a real estate investment trust. The Company’s primary business is the acquisition, development and management of multifamily residential properties. Its segments include Boston, New York, Washington D.C., Southern California, San Francisco, Seattle and Other Markets. Southern California includes Los Angeles, San Diego and Orange County. Other Markets includes Phoenix. It is engaged in leasing of apartment units to residents. It focuses on rental apartment properties in urban and high-density suburban coastal gateway markets. As of December 31, 2016, the Company owned 302 properties located in 10 states and the District of Columbia consisting of 77,458 apartment units. The Company’s projects include The Alton, 455 Eye Street, 855 Brannan, Cascade, One Henry Adams, 340 Fremont and Vista 99. ERP Operating Limited Partnership (ERPOP) conducts the multifamily residential property business of Equity Residential.
About Home Properties
Home Properties, Inc. (Home Properties) is a self-administered and self-managed real estate investment trust (REIT). The Company owns, operates, acquires and repositions apartment communities in suburbs of metropolitan areas, primarily along the East Coast of the United States. The Company conducts its business through Home Properties, L.P. (the Operating Partnership), and a management company, Home Properties Resident Services, Inc. (HPRS). As of December 31, 2014, the Company owned and operated 121 communities with 42,107 apartment units. The Company’s properties are two- and three-story garden style apartment buildings in landscaped settings and brick or other masonry construction. As of December 31, 2014, approximately 26.6%, 24.9%, 14.0%, 8.5% and 8.5% of the Company’s Properties are located in the Washington, D.C., Baltimore, Philadelphia, Long Island and Northern New Jersey markets, respectively.
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