Reviewing Post Properties (PPS) & Equity Residential (EQR)
Post Properties (NYSE: PPS) and Equity Residential (NYSE:EQR) are both financials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.
Post Properties pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. Equity Residential pays an annual dividend of $2.02 per share and has a dividend yield of 3.1%. Post Properties pays out 131.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. Post Properties has increased its dividend for 6 consecutive years. Equity Residential is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
94.3% of Post Properties shares are owned by institutional investors. Comparatively, 91.0% of Equity Residential shares are owned by institutional investors. 2.2% of Post Properties shares are owned by insiders. Comparatively, 3.8% of Equity Residential shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Post Properties and Equity Residential’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Equity Residential||$2.43 billion||9.96||$1.57 billion||$2.23||29.54|
Equity Residential has higher revenue and earnings than Post Properties. Equity Residential is trading at a lower price-to-earnings ratio than Post Properties, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations for Post Properties and Equity Residential, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Equity Residential has a consensus target price of $67.75, suggesting a potential upside of 2.84%. Given Equity Residential’s higher probable upside, analysts plainly believe Equity Residential is more favorable than Post Properties.
Risk & Volatility
Post Properties has a beta of 0.12, meaning that its stock price is 88% less volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500.
This table compares Post Properties and Equity Residential’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Equity Residential beats Post Properties on 11 of the 13 factors compared between the two stocks.
About Post Properties
Post Properties, Inc. is a self-administrated and self-managed equity real estate investment trust (REIT). The Company’s segments include Fully stabilized (same store) communities, which includes apartment communities that have been stabilized for both the current and prior year; Newly stabilized communities, which includes communities that reached stabilized occupancy in the prior year; Lease-up communities, which includes communities that are under development, rehabilitation and in lease-up but were not stabilized by the beginning of the current year, including communities that stabilized during the current year; Acquired communities, which include communities acquired in the current or prior year, and Held for sale and sold communities, which include apartment and mixed-use communities classified as held for sale or sold. Its operating divisions include Post Apartment Management, Post Construction and Property Services, Post Investment Group and Post Corporate Services.
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.
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