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Equity Residential: Another Week in Red

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Jul. 3 2015, Updated 10:06 a.m. ET

Share price performance

Equity Residential (EQR) fell 3.87% in the past week and 4.93% in the last month. EQR underperformed the SPDR S&P 500 Index (SPY) by 3.47% and the Financial Select Sector SPDR ETF (XLF) by 3.26% last week. Other REIT stock that contributed to the downfall were Ventas (VTR) and Health Care REIT (HCN), down 3.68% and 3.43%, respectively, in the week ended June 26.

EQR closed last week at $71.20, below its 20-day, 50-day, and 100-day moving averages of $72, $74, and $76, respectively. With a consensus price target of $81.28, it’s still trading at 10.80% below estimates.

REITs are traditionally favorable investments for dividend-seeking investors. EQR has a trailing 12-month dividend yield of 2.96%. With bond yields on the rise, dividend spreads tighten, thereby making REITs less attractive.

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Fundamental analysis

EQR reported earnings per share (or EPS) of $0.49 for 1Q15, while 2Q15 estimates are at $0.44 per share. For the financial year, analysts estimate an EPS of $1.86.

During the quarter ended March 2015, return on assets was 3.31%, and return on equity was 7.12%, down by 136 basis points quarter-over-quarter.

Equity Residential (EQR) declared a quarterly dividend of $0.5525 per share, which is $2.21 on an annualized basis.

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