Equity Residential (NYSE:EQR) vs. BRT Apartments (NYSE:BRT) Critical Analysis

BRT Apartments (NYSE:BRT) and Equity Residential (NYSE:EQR) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Profitability

This table compares BRT Apartments and Equity Residential’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BRT Apartments	-10.02%	-4.96%	-1.37%
Equity Residential	37.58%	10.30%	5.54%

Earnings & Valuation

This table compares BRT Apartments and Equity Residential”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BRT Apartments	$95.63 million	2.98	-$9.79 million	($0.51)	-29.38
Equity Residential	$2.98 billion	7.80	$1.04 billion	$3.03	20.17

Equity Residential has higher revenue and earnings than BRT Apartments. BRT Apartments is trading at a lower price-to-earnings ratio than Equity Residential, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

29.1% of BRT Apartments shares are owned by institutional investors. Comparatively, 92.7% of Equity Residential shares are owned by institutional investors. 40.2% of BRT Apartments shares are owned by insiders. Comparatively, 1.0% 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 will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for BRT Apartments and Equity Residential, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BRT Apartments	1	1	2	0	2.25
Equity Residential	0	11	8	0	2.42

BRT Apartments presently has a consensus price target of $19.75, suggesting a potential upside of 31.80%. Equity Residential has a consensus price target of $70.02, suggesting a potential upside of 14.56%. Given BRT Apartments’ higher possible upside, analysts clearly believe BRT Apartments is more favorable than Equity Residential.

Risk and Volatility

BRT Apartments has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Dividends

BRT Apartments pays an annual dividend of $1.00 per share and has a dividend yield of 6.7%. Equity Residential pays an annual dividend of $2.77 per share and has a dividend yield of 4.5%. BRT Apartments pays out -196.1% of its earnings in the form of a dividend. Equity Residential pays out 91.4% 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 has increased its dividend for 4 consecutive years. BRT Apartments is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Equity Residential beats BRT Apartments on 12 of the 17 factors compared between the two stocks.

About BRT Apartments

BRT Apartments Corp. is a real estate investment trust. It engages in the ownership, operation, and holding interests in joint ventures that own and operate multi-family properties. The company was founded in June 1972 and is headquartered in Great Neck, NY.

About Equity Residential

Equity Residential is committed to creating communities where people thrive. The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract affluent long-term renters. Equity Residential owns or has investments in 305 properties consisting of 80,683 apartment units, with an established presence in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin.