Colony Capital (NYSE:CLNY) and Equity Residential (EQR) Head to Head Analysis
Colony Capital (NYSE: CLNY) and Equity Residential (NYSE:EQR) are both financials companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitabiliy, valuation, institutional ownership, dividends, risk and analyst recommendations.
This table compares Colony Capital and Equity Residential’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Colony Capital pays an annual dividend of $1.60 per share and has a dividend yield of 7.4%. Equity Residential pays an annual dividend of $2.02 per share and has a dividend yield of 3.0%. Colony Capital pays out 179.8% 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. Colony Capital has increased its dividend for 7 consecutive years. Colony Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Colony Capital has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500.
Earnings & Valuation
This table compares Colony Capital and Equity Residential’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Equity Residential||$2.43 billion||10.14||$1.57 billion||$2.23||30.08|
Equity Residential has higher revenue and earnings than Colony Capital. Colony Capital 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 and Insider Ownership
94.1% of Colony Capital shares are held by institutional investors. Comparatively, 92.4% of Equity Residential shares are held by institutional investors. 17.7% of Colony Capital shares are held by insiders. Comparatively, 3.8% of Equity Residential shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This is a breakdown of current ratings and recommmendations for Colony Capital and Equity Residential, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Colony Capital presently has a consensus price target of $27.00, suggesting a potential upside of 25.46%. Equity Residential has a consensus price target of $67.30, suggesting a potential upside of 0.33%. Given Colony Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Colony Capital is more favorable than Equity Residential.
Colony Capital beats Equity Residential on 8 of the 14 factors compared between the two stocks.
About Colony Capital
Colony Capital, Inc., formerly Colony Financial, Inc., is a global real estate and investment management company. The Company operates through five segments: Real Estate Equity, including Light industrial real estate assets and operating platform; Single-family residential rentals through an investment in Colony Starwood Homes and Other real estate equity investments; Real Estate Debt, which includes loan originations and acquisitions, and Investment Management, which includes investment management of the Company-sponsored funds and other investment vehicles. Through its global investment management business, it has over $18.8 billion of assets under management. Its business objective is to provide risk-adjusted returns to its investors through a diversified portfolio of direct and indirect real estate-related equity and real estate debt investments, and fee bearing management contracts on investment funds that it manages.
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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