Financial Review: Independence Realty Trust (IRT) versus Essex Property Trust (ESS)
Independence Realty Trust (NYSE: IRT) and Essex Property Trust (NYSE:ESS) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.
Earnings and Valuation
This table compares Independence Realty Trust and Essex Property Trust’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Independence Realty Trust||$153.36 million||5.63||-$9.80 million||($0.26)||-39.77|
|Essex Property Trust||$1.29 billion||13.21||$414.97 million||$7.99||32.39|
Essex Property Trust has higher revenue and earnings than Independence Realty Trust. Independence Realty Trust is trading at a lower price-to-earnings ratio than Essex Property Trust, indicating that it is currently the more affordable of the two stocks.
Independence Realty Trust pays an annual dividend of $0.72 per share and has a dividend yield of 7.0%. Essex Property Trust pays an annual dividend of $7.00 per share and has a dividend yield of 2.7%. Independence Realty Trust pays out -276.9% of its earnings in the form of a dividend. Essex Property Trust pays out 87.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Independence Realty Trust has increased its dividend for 23 consecutive years. Independence Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Independence Realty Trust has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Essex Property Trust has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.
This is a breakdown of current recommendations and price targets for Independence Realty Trust and Essex Property Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Independence Realty Trust||0||0||6||0||3.00|
|Essex Property Trust||3||9||7||0||2.21|
Independence Realty Trust currently has a consensus target price of $10.80, indicating a potential upside of 4.45%. Essex Property Trust has a consensus target price of $265.29, indicating a potential upside of 2.51%. Given Independence Realty Trust’s stronger consensus rating and higher possible upside, analysts plainly believe Independence Realty Trust is more favorable than Essex Property Trust.
Institutional & Insider Ownership
62.1% of Independence Realty Trust shares are held by institutional investors. Comparatively, 100.0% of Essex Property Trust shares are held by institutional investors. 0.6% of Independence Realty Trust shares are held by company insiders. Comparatively, 3.3% of Essex Property Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares Independence Realty Trust and Essex Property Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Independence Realty Trust||-10.91%||-3.08%||-1.28%|
|Essex Property Trust||38.95%||8.19%||4.20%|
Essex Property Trust beats Independence Realty Trust on 11 of the 17 factors compared between the two stocks.
About Independence Realty Trust
Independence Realty Trust, Inc. is an internally-managed real estate investment trust (REIT). The Company is engaged in the business of owning, managing, operating, leasing, acquiring, developing, investing in, and disposing of real estate assets. The Company owns apartment properties in geographic non-gateway markets. As of September 26, 2017, the Company owns and operates 55 multifamily apartment properties, totaling 15,165 units. Its properties include Copper Mill, Crestmont, Heritage Trace, Runaway Bay, Berkshire Square, The Crossings, Reserve at Eagle Ridge, Windrush, Heritage Park, Raindance, Augusta, Invitational, Carrington Park, Walnut Hill, Lenoxplace, Bennington Pond, Jamestown, Meadows, Oxmoor, Bayview Club, Arbors River Oaks, Fox Trails, Bridge Pointe, The Aventine Greenville and Westmont Commons.
About Essex Property Trust
Essex Property Trust, Inc. is a self-administered and self-managed real estate investment trust. The Company is engaged primarily in the ownership, operation, management, acquisition, development and redevelopment of predominantly apartment communities, located along the West Coast. Its segments include Southern California, Northern California, Seattle Metro and Other real estate assets. The Company owns all of its interest in its real estate and other investments directly or indirectly through Essex Portfolio, L.P. (the Operating Partnership). Its properties include Mio, Form 15, Emerson Valley Village and Ashton Sherman Village. As of December 31, 2016, it owned or held an interest in 245 communities, aggregating 59,645 apartment homes, excluding its ownership in preferred equity investments, as well as two operating commercial buildings (totaling approximately 140,564 square feet), and six active development projects with 2,223 apartment homes in various stages of development.
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