Critical Survey: InterRent Real Estate Investment Trust (OTCMKTS:IIPZF) versus Equity Residential (NYSE:EQR)

InterRent Real Estate Investment Trust (OTCMKTS:IIPZF) and Equity Residential (NYSE:EQR) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.

Profitability

This table compares InterRent Real Estate Investment Trust and Equity Residential’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
InterRent Real Estate Investment Trust	-74.48%	-7.71%	-4.37%
Equity Residential	33.22%	9.05%	4.85%

Dividends

InterRent Real Estate Investment Trust pays an annual dividend of $0.29 per share and has a dividend yield of 3.0%. Equity Residential pays an annual dividend of $2.77 per share and has a dividend yield of 4.2%. InterRent Real Estate Investment Trust pays out -32.2% of its earnings in the form of a dividend. Equity Residential pays out 104.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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.

Valuation & Earnings

This table compares InterRent Real Estate Investment Trust and Equity Residential”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
InterRent Real Estate Investment Trust	$179.73 million	7.54	-$113.59 million	($0.90)	-10.78
Equity Residential	$2.98 billion	8.40	$1.04 billion	$2.65	24.75

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

Volatility & Risk

InterRent Real Estate Investment Trust has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Insider & Institutional Ownership

92.7% of Equity Residential shares are held by institutional investors. 6.8% of InterRent Real Estate Investment Trust shares are held by company insiders. Comparatively, 1.1% of Equity Residential shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for InterRent Real Estate Investment Trust and Equity Residential, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
InterRent Real Estate Investment Trust	0	0	0	3	4.00
Equity Residential	0	7	8	0	2.53

Equity Residential has a consensus price target of $76.90, suggesting a potential upside of 17.26%. Given Equity Residential’s higher possible upside, analysts clearly believe Equity Residential is more favorable than InterRent Real Estate Investment Trust.

Summary

Equity Residential beats InterRent Real Estate Investment Trust on 13 of the 18 factors compared between the two stocks.

About InterRent Real Estate Investment Trust

InterRent?REIT is a growth-oriented real estate investment trust engaged in increasing Unitholder value and creating a growing and sustainable distribution?through the acquisition and ownership of multi-residential properties. InterRent’s strategy is to expand its portfolio primarily within?markets that have exhibited stable market vacancies,?sufficient suites available to attain the critical mass necessary to implement?an efficient portfolio management structure, and?offer opportunities for accretive acquisitions. InterRent’s primary objectives are to use the proven industry experience of the Trustees,?Management and Operational Team to: (i)?to grow both funds from operations per Unit and net asset value per Unit through investments in a diversified portfolio of multi-residential properties; (ii)?to provide Unitholders with sustainable and growing cash distributions, payable monthly; and (iii)?to maintain a conservative payout ratio and balance sheet.

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.