Head to Head Analysis: Equity Residential (NYSE:EQR) and Armada Hoffler Properties (NYSE:AHH)

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

Risk & Volatility

Armada Hoffler Properties has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Insider & Institutional Ownership

66.4% of Armada Hoffler Properties shares are owned by institutional investors. Comparatively, 92.7% of Equity Residential shares are owned by institutional investors. 10.2% of Armada Hoffler Properties shares are owned by insiders. Comparatively, 1.1% of Equity Residential shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Armada Hoffler Properties pays an annual dividend of $0.56 per share and has a dividend yield of 8.7%. Equity Residential pays an annual dividend of $2.77 per share and has a dividend yield of 4.7%. Armada Hoffler Properties pays out 466.7% 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 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 increased its dividend for 4 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Armada Hoffler Properties	4.39%	3.40%	0.95%
Equity Residential	37.58%	10.31%	5.56%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Armada Hoffler Properties and Equity Residential, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Armada Hoffler Properties	1	2	2	0	2.20
Equity Residential	0	10	7	0	2.41

Armada Hoffler Properties currently has a consensus target price of $8.38, indicating a potential upside of 29.54%. Equity Residential has a consensus target price of $73.52, indicating a potential upside of 24.78%. Given Armada Hoffler Properties’ higher probable upside, analysts clearly believe Armada Hoffler Properties is more favorable than Equity Residential.

Earnings & Valuation

This table compares Armada Hoffler Properties and Equity Residential”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Armada Hoffler Properties	$708.47 million	0.95	$35.65 million	$0.12	53.88
Equity Residential	$2.98 billion	7.55	$1.04 billion	$2.65	22.23

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

Summary

Equity Residential beats Armada Hoffler Properties on 12 of the 17 factors compared between the two stocks.

About Armada Hoffler Properties

Armada Hoffler Properties, Inc. (the “Company”) is a vertically integrated, self-managed real estate investment trust (“REIT”) with over four decades of experience developing, building, acquiring, and managing high-quality retail, office, and multifamily properties located primarily in the Mid-Atlantic and Southeastern United States. In addition to the ownership of the Company’s operating property portfolio, the Company develops and builds properties for its own account and through joint ventures between the Company and unaffiliated partners and also invests in development projects through real estate financing arrangements. The Company also provides general construction and development services to third-party clients. The Company’s construction and development experience includes mid- and high-rise office buildings, retail strip malls, retail power centers, multifamily apartment communities, hotels and conference centers, single- and multi-tenant industrial, distribution, and manufacturing facilities, educational, medical, and special purpose facilities, government projects, parking garages, and mixed-use town centers. The Company is the sole general partner of Armada Hoffler, L.P. (the “Operating Partnership”) and, as of March 31, 2024, owned 75.5% of the economic interest in the Operating Partnership, of which 0.1% is held as general partnership units. The operations of the Company are conducted primarily through the Operating Partnership and the wholly owned subsidiaries thereof.

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.