Critical Contrast: Veris Residential (NYSE:VRE) & Equity Residential (NYSE:EQR)

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

Volatility & Risk

Equity Residential has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Veris Residential has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Insider and Institutional Ownership

92.7% of Equity Residential shares are held by institutional investors. Comparatively, 93.0% of Veris Residential shares are held by institutional investors. 1.0% of Equity Residential shares are held by insiders. Comparatively, 16.4% of Veris Residential shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Equity Residential and Veris Residential, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equity Residential	0	13	6	1	2.40
Veris Residential	0	3	1	0	2.25

Equity Residential currently has a consensus price target of $69.63, indicating a potential upside of 19.13%. Veris Residential has a consensus price target of $18.67, indicating a potential downside of 1.42%. Given Equity Residential’s stronger consensus rating and higher possible upside, equities analysts clearly believe Equity Residential is more favorable than Veris Residential.

Profitability

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

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

Dividends

Equity Residential pays an annual dividend of $2.77 per share and has a dividend yield of 4.7%. Veris Residential pays an annual dividend of $0.32 per share and has a dividend yield of 1.7%. 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 pays out 40.0% of its earnings in the form of a dividend. Equity Residential has increased its dividend for 4 consecutive years and Veris Residential has increased its dividend for 1 consecutive years. Equity Residential is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equity Residential	$3.09 billion	7.13	$1.12 billion	$2.93	19.95
Veris Residential	$288.43 million	6.14	$75.24 million	$0.80	23.67

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.

Summary

Equity Residential beats Veris Residential on 13 of the 18 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 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.