April 24, 2025 a 07:31 am
EQR: Dividend Analysis - Equity Residential
Equity Residential is a publicly traded real estate investment trust (REIT) focused on high-quality apartment properties. Known for its consistent dividend payments over the past 33 years, the company offers a dividend yield of approximately 3.80%. Current payout ratios suggest a high percentage of earnings and free cash flow being returned to shareholders as dividends, highlighting an investor-focused approach.
📊 Overview
Equity Residential operates in the residential real estate sector, offering a notable dividend yield of approximately 3.80%. Despite a history of 33 years of dividend payments, the recent decline in growth highlights caution.
| Data Point | Value |
|---|---|
| Sector | Real Estate |
| Dividend Yield | 3.80% |
| Current Dividend per Share | $2.70 |
| Dividend History | 33 years |
| Last Cut or Suspension | None |
📈 Dividend History
The company's dividend history highlights its reliability as an income source for shareholders, marked by a payment consistency. This is crucial for investors seeking stable income, though recent growth has been negative.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.3675 |
| 2024 | 2.025 |
| 2023 | 2.6500 |
| 2022 | 2.500 |
| 2021 | 2.4100 |
📉 Dividend Growth
Monitoring dividend growth is vital, offering insights into future income potential. EQR's recent growth rates indicate a decline, suggesting stability but less aggressive dividend escalations.
| Time | Growth |
|---|---|
| 3 years | -5.64% |
| 5 years | -2.26% |
The average dividend growth is -2.26% over 5 years. This shows moderate but steady dividend growth, drawing attention to a cautious investor stance.
💼 Payout Ratio
The payout ratios provide insight into the sustainability of dividend distributions. With high percentages, the company allocates a majority of earnings and free cash flows to dividends, hinting at limited reinvestment opportunities.
| Key Figure | Ratio |
|---|---|
| EPS-based | 99.17% |
| Free cash flow-based | 81.62% |
With EPS-based payout at 99.17% and FCF-based payout at 81.62%, Equity Residential's dividends are almost fully covering its earnings and cash flows, suggesting high commitment to shareholder returns.
💰 Cashflow & Capital Efficiency
Analyzing cash flow metrics underscores capital efficiency and cash-generating capabilities. These figures assure investors of the company's ability to sustain operations and dividends amidst market dynamics.
| Key Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 4.62% | 5.18% | 5.51% |
| Earnings Yield | 3.81% | 3.61% | 3.50% |
| CAPEX to Operating Cash Flow | 20.25% | 21.76% | 15.96% |
| Stock-based Compensation to Revenue | 1.05% | 1.11% | 1.08% |
| Free Cash Flow / Operating Cash Flow Ratio | 79.75% | 78.24% | 84.04% |
| Return on Invested Capital | 12.18% | 5.91% | 3.99% |
The metrics suggest a stable cash flow environment with efficient capital allocation, vital for future growth initiatives and consistent dividend payments.
📄 Balance Sheet & Leverage Analysis
Evaluating the balance sheet provides an understanding of financial health, liquidity, and leverage. These factors are critical for assessing long-term solvency and dividend-paying ability.
| Key Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 76.30% | 69.48% | 69.22% |
| Debt-to-Assets | 40.45% | 38.44% | 38.25% |
| Debt-to-Capital | 43.28% | 40.99% | 40.91% |
| Net Debt to EBITDA | 3.58 | 4.30 | 4.50 |
| Current Ratio | 0.16 | 0.17 | 0.26 |
| Quick Ratio | 0.16 | 0.17 | 0.26 |
| Financial Leverage | 1.89 | 1.81 | 1.81 |
The balance sheet illustrates a disciplined financial strategy, suggesting a manageable leverage level that ensures the availability of capital for strategic opportunities.
🌟 Fundamental Strength & Profitability
Profitability and fundamental strength metrics are crucial for evaluating operational efficiency and profit generation, providing insights into sustaining dividends and potential growth.
| Key Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 9.38% | 7.54% | 6.95% |
| Return on Assets | 4.97% | 4.17% | 3.84% |
| Net Margin | 34.76% | 29.07% | 28.40% |
| EBIT Margin | 45.87% | 39.83% | 40.06% |
| EBITDA Margin | 78.31% | 61.92% | 62.37% |
| Gross Margin | 85.50% | 63.59% | 64.08% |
| Research & Development to Revenue | 0.00% | 0.00% | 0.00% |
These profitability metrics underscore strong margins and return ratios, delivering sustainable dividends and contributing to investor returns.
📈 Price Development
✨ Dividend Scoring System
| Category | Score | Visual |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 2 | |
| Payout Ratio | 3 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 31/40
✅ Rating
Equity Residential offers a robust dividend profile backed by a longstanding history of stable payments. Despite recent negative growth rates, the overall payout and balance sheet metrics suggest resilience and dedication to shareholder returns. Investors seeking income stability within the real estate sector may find EQR an appealing addition to their portfolio. The company's fundamentals highlight its ability to sustain its dividend strategy, even amidst periods of financial pressures.