Veris Residential (NYSE:VRE) vs. Equity Residential (NYSE:EQR) Critical Analysis

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Veris Residential and Equity Residential, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Veris Residential	0	3	1	0	2.25
Equity Residential	0	12	7	1	2.45

Veris Residential presently has a consensus target price of $19.67, suggesting a potential upside of 3.86%. Equity Residential has a consensus target price of $69.73, suggesting a potential upside of 18.69%. Given Equity Residential’s stronger consensus rating and higher possible upside, analysts plainly believe Equity Residential is more favorable than Veris Residential.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Veris Residential	26.08%	5.73%	2.46%
Equity Residential	36.20%	9.98%	5.37%

Valuation and Earnings

This table compares Veris Residential and Equity Residential”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Veris Residential	$288.43 million	6.14	$75.24 million	$0.80	23.67
Equity Residential	$3.09 billion	7.17	$1.12 billion	$2.93	20.05

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

Dividends

Veris Residential pays an annual dividend of $0.32 per share and has a dividend yield of 1.7%. Equity Residential pays an annual dividend of $2.77 per share and has a dividend yield of 4.7%. Veris Residential pays out 40.0% of its earnings in the form of a dividend. Equity Residential pays out 94.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Veris Residential has increased its dividend for 1 consecutive years and Equity Residential has increased its dividend for 4 consecutive years. Equity Residential is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

93.0% of Veris Residential shares are owned by institutional investors. Comparatively, 92.7% of Equity Residential shares are owned by institutional investors. 16.4% of Veris Residential shares are owned by company insiders. Comparatively, 1.1% of Equity Residential shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Veris Residential has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Summary

Equity Residential beats Veris Residential on 13 of the 18 factors compared between the two stocks.

About Veris Residential

Veris Residential, Inc. is a forward-thinking, environmentally and socially conscious real estate investment trust (REIT) that primarily owns, operates, acquires and develops holistically-inspired, Class A multifamily properties that meet the sustainability-conscious lifestyle needs of today’s residents while seeking to positively impact the communities it serves and the planet at large. The company is guided by an experienced management team and Board of Directors and is underpinned by leading corporate governance principle; a best-in-class and sustainable approach to operations; and an inclusive culture based on equality and meritocratic empowerment.

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.