Elme Communities (NYSE:ELME) and Equity Residential (NYSE:EQR) Critical Survey

Equity Residential (NYSE:EQR) and Elme Communities (NYSE:ELME) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Earnings & Valuation

This table compares Equity Residential and Elme Communities”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equity Residential	$2.98 billion	7.92	$1.04 billion	$3.03	20.47
Elme Communities	$241.93 million	6.30	-$13.10 million	($1.52)	-11.37

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

Risk and Volatility

Equity Residential has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, Elme Communities has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Profitability

This table compares Equity Residential and Elme Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equity Residential	37.58%	10.30%	5.54%
Elme Communities	-54.57%	-13.15%	-7.52%

Dividends

Equity Residential pays an annual dividend of $2.77 per share and has a dividend yield of 4.5%. Elme Communities pays an annual dividend of $0.72 per share and has a dividend yield of 4.2%. Equity Residential pays out 91.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Elme Communities pays out -47.4% of its earnings in the form of a dividend. Equity Residential has raised 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

92.7% of Equity Residential shares are owned by institutional investors. Comparatively, 87.9% of Elme Communities shares are owned by institutional investors. 1.0% of Equity Residential shares are owned by company insiders. Comparatively, 1.4% of Elme Communities shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Equity Residential and Elme Communities, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equity Residential	0	10	8	0	2.44
Elme Communities	1	3	0	0	1.75

Equity Residential presently has a consensus price target of $70.27, indicating a potential upside of 13.28%. Elme Communities has a consensus price target of $18.50, indicating a potential upside of 7.09%. Given Equity Residential’s stronger consensus rating and higher probable upside, analysts plainly believe Equity Residential is more favorable than Elme Communities.

Summary

Equity Residential beats Elme Communities on 13 of the 17 factors compared between the two stocks.

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.

About Elme Communities

Elme Communities is committed to elevating what home can be for middle-income renters by providing a higher level of quality, service, and experience. The Company is a multifamily real estate investment trust that owns and operates approximately 9,400 apartment homes in the Washington, DC metro and the Atlanta metro regions, and owns approximately 300,000 square feet of commercial space. Focused on providing quality, affordable homes to a deep, solid, and underserved base of mid-market demand, Elme Communities is building long-term value for shareholders.