Investors are closely examining the performances of two significant players in the real estate sector: Equity Residential (NYSE: EQR) and BRT Apartments (NYSE: BRT). This analysis evaluates the strengths and weaknesses of each company based on various financial metrics, including dividends, earnings, institutional ownership, and analyst recommendations.
Institutional and Insider Ownership
A notable distinction between the two companies lies in their ownership structures. Approximately 92.7% of Equity Residential shares are held by institutional investors, indicating strong confidence from large financial entities. In contrast, BRT Apartments has 29.1% of its shares held by institutional investors.
Additionally, insider ownership reveals a different dynamic. Only 1.0% of Equity Residential shares are owned by company insiders, while 40.2% of BRT Apartments shares are held by insiders. High insider ownership can reflect a commitment to the company’s success, which may appeal to some investors.
Dividend Performance
When it comes to dividends, Equity Residential offers an annual dividend of $2.77 per share, resulting in a yield of 4.6%. Meanwhile, BRT Apartments pays an annual dividend of $1.00 per share, with a higher yield of 6.9%.
Despite Equity Residential having a longer track record, increasing its dividend for four consecutive years, its payout ratio of 91.4% of earnings raises concerns about sustainability. On the other hand, BRT Apartments exhibits an alarming payout ratio of -196.1%, indicating that it distributes more than it earns.
Strong dividends can attract investors looking for income, and based on yield and payout ratios, BRT Apartments may appear more appealing, even considering its concerning dividend sustainability.
Profitability and Valuation Metrics
Examining profitability, Equity Residential demonstrates stronger earnings and revenue compared to BRT Apartments. However, BRT Apartments trades at a lower price-to-earnings ratio, suggesting it may be the more affordable investment option at present.
Volatility is another critical aspect for potential investors. Equity Residential has a beta of 0.75, indicating its stock is generally less volatile than the S&P 500 by 25%. Conversely, BRT Apartments has a beta of 0.97, suggesting its stock is only slightly less volatile than the broader market.
Analyst Recommendations and Market Outlook
Recent analyst ratings provide further insight into the potential of these stocks. According to MarketBeat.com, Equity Residential has a consensus price target of $70.02, reflecting a potential upside of 16.65%. In contrast, BRT Apartments boasts a consensus price target of $19.75, indicating a more substantial potential upside of 36.16%. This suggests that analysts favor BRT Apartments over Equity Residential for future growth.
In summary, while Equity Residential surpasses BRT Apartments in many categories, including revenue and stability, BRT Apartments offers a higher dividend yield and greater potential upside according to analyst forecasts.
Company Profiles
Equity Residential, a member of the S&P 500, focuses on creating communities that attract affluent, long-term renters. The company manages 305 properties with 80,683 apartment units across major urban centers, including Boston, New York, Washington, D.C., and Seattle.
Founded in June 1972, BRT Apartments Corp. operates as a real estate investment trust, engaging in the ownership and management of multi-family properties. Headquartered in Great Neck, New York, it has built a solid reputation in the real estate sector.
Investors must weigh these factors carefully as they consider the prospects of Equity Residential versus BRT Apartments. Each company presents unique opportunities and challenges, and ongoing analysis will be crucial for informed investment decisions.
