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Is it Wise to Hold Equity Residential (EQR) Stock Right Now?
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Equity Residential (EQR - Free Report) recently announced that it has collected about 93% of its April cash rents through Apr 7, and is having talks with the remainder of the residents on payment options. The company also informed that due to the current uncertain situation, it is unable to quantify the impact on its financial performance and intends to issue an update during the first-quarter 2020 earnings call.
However, the company noted that its same-store portfolio remained well occupied at 96.5% as of Mar 24, and it is also seeing indications of increased retention. However, due to several restrictions imposed by the government, the company is witnessing reduced foot traffic and applications.
Over the years, the company has made concerted efforts toward repositioning its portfolio from low barrier-to-entry/non-core markets to high barrier-to-entry/core markets. It has a proven track record of opportunistic acquisitions, timely dispositions and focused development.
On the capital front, the company has been taking strategic steps. In Nov, 2019, Equity Residential fortified its financial position by entering into a $2.5-billion multi-currency revolving credit facility, replacing its prior $2-billion credit agreement. The company has also raised the maximum size for its unsecured commercial paper note program from $500 million to $1 billion. Such strategic measures are aimed at strengthening the company’s outstanding balance sheet, liquidity and financial flexibility. This will help enjoy greater liquidity for day-to-day operations and support its growth endeavors even amid current challenging times.
Additionally, solid dividend payouts remain the biggest attraction for REIT investors and Equity Residential remains committed to this. In March, the company announced a 6.2% sequential hike in its first-quarter 2020 dividend to 60.25 cents per share.
However, the company has been experiencing high new supply across a number of its markets. This elevated supply level is likely to keep straining new lease rates, occupancy as well as retention, and impede revenue growth this year. Furthermore, concession activity is high amid elevated supply, which is another concern.
Also, the coronavirus pandemic is another headwind, with its overall impact on the larger economy still to be gauged. Moreover, the rent-paying capability of the tenants will likely be hurt.
This Zacks Rank #3 (Hold) company has underperformed its industry over the past year. Shares of Equity Residential have depreciated 11.2%, while the industry has lost 10.3% during this period.
Stocks to Consider
NexPoint Residential Trust, Inc.’s (NXRT - Free Report) FFO per share estimate for the ongoing year moved 1.2% north to $2.56 over the past month. The stock currently carries a Zacks Rank #2 (Buy).
Apartment Investment and Management Company’s (AIV - Free Report) Zacks Consensus Estimate of $2.62 for 2020 earnings indicates growth of 4.8% year over year. The stock currently holds a Zacks Rank of 2.
Bluerock Residential Growth REIT, Inc.’s Zacks Consensus Estimate of 84 cents for 2020 suggests 2.4% year-over-year growth .The stock currently carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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Is it Wise to Hold Equity Residential (EQR) Stock Right Now?
Equity Residential (EQR - Free Report) recently announced that it has collected about 93% of its April cash rents through Apr 7, and is having talks with the remainder of the residents on payment options. The company also informed that due to the current uncertain situation, it is unable to quantify the impact on its financial performance and intends to issue an update during the first-quarter 2020 earnings call.
However, the company noted that its same-store portfolio remained well occupied at 96.5% as of Mar 24, and it is also seeing indications of increased retention. However, due to several restrictions imposed by the government, the company is witnessing reduced foot traffic and applications.
Over the years, the company has made concerted efforts toward repositioning its portfolio from low barrier-to-entry/non-core markets to high barrier-to-entry/core markets. It has a proven track record of opportunistic acquisitions, timely dispositions and focused development.
On the capital front, the company has been taking strategic steps. In Nov, 2019, Equity Residential fortified its financial position by entering into a $2.5-billion multi-currency revolving credit facility, replacing its prior $2-billion credit agreement. The company has also raised the maximum size for its unsecured commercial paper note program from $500 million to $1 billion. Such strategic measures are aimed at strengthening the company’s outstanding balance sheet, liquidity and financial flexibility. This will help enjoy greater liquidity for day-to-day operations and support its growth endeavors even amid current challenging times.
Additionally, solid dividend payouts remain the biggest attraction for REIT investors and Equity Residential remains committed to this. In March, the company announced a 6.2% sequential hike in its first-quarter 2020 dividend to 60.25 cents per share.
However, the company has been experiencing high new supply across a number of its markets. This elevated supply level is likely to keep straining new lease rates, occupancy as well as retention, and impede revenue growth this year. Furthermore, concession activity is high amid elevated supply, which is another concern.
Also, the coronavirus pandemic is another headwind, with its overall impact on the larger economy still to be gauged. Moreover, the rent-paying capability of the tenants will likely be hurt.
The Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has been revised about 2% downward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
This Zacks Rank #3 (Hold) company has underperformed its industry over the past year. Shares of Equity Residential have depreciated 11.2%, while the industry has lost 10.3% during this period.
Stocks to Consider
NexPoint Residential Trust, Inc.’s (NXRT - Free Report) FFO per share estimate for the ongoing year moved 1.2% north to $2.56 over the past month. The stock currently carries a Zacks Rank #2 (Buy).
Apartment Investment and Management Company’s (AIV - Free Report) Zacks Consensus Estimate of $2.62 for 2020 earnings indicates growth of 4.8% year over year. The stock currently holds a Zacks Rank of 2.
Bluerock Residential Growth REIT, Inc.’s Zacks Consensus Estimate of 84 cents for 2020 suggests 2.4% year-over-year growth .The stock currently carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>