Financial Comparison: Equity Residential (EQR) vs. Silver Bay Realty Trust (SBY)

Equity Residential (NYSE: EQR) and Silver Bay Realty Trust (NYSE:SBY) are both financials companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.

Earnings & Valuation

This table compares Equity Residential and Silver Bay Realty Trust’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Equity Residential $2.43 billion 9.31 $4.29 billion $2.90 21.19
Silver Bay Realty Trust N/A N/A N/A ($0.07) -307.00

Equity Residential has higher revenue and earnings than Silver Bay Realty Trust. Silver Bay Realty 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.

Profitability

This table compares Equity Residential and Silver Bay Realty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equity Residential 30.88% 7.22% 3.66%
Silver Bay Realty Trust -5.71% -1.42% -0.61%

Dividends

Equity Residential pays an annual dividend of $2.02 per share and has a dividend yield of 3.3%. Silver Bay Realty Trust pays an annual dividend of $0.52 per share and has a dividend yield of 2.4%. Equity Residential pays out 69.7% of its earnings in the form of a dividend. Silver Bay Realty Trust pays out -742.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. 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.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Equity Residential and Silver Bay Realty Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equity Residential 1 8 4 0 2.23
Silver Bay Realty Trust 0 3 0 0 2.00

Equity Residential presently has a consensus price target of $68.85, suggesting a potential upside of 12.02%. Silver Bay Realty Trust has a consensus price target of $20.25, suggesting a potential downside of 5.77%. Given Equity Residential’s stronger consensus rating and higher probable upside, analysts clearly believe Equity Residential is more favorable than Silver Bay Realty Trust.

Insider and Institutional Ownership

94.0% of Equity Residential shares are owned by institutional investors. Comparatively, 73.6% of Silver Bay Realty Trust shares are owned by institutional investors. 3.8% of Equity Residential shares are owned by insiders. Comparatively, 7.3% of Silver Bay Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Equity Residential beats Silver Bay Realty Trust on 12 of the 14 factors compared between the two stocks.

About Equity Residential

Equity Residential is a real estate investment trust. The Company’s primary business is the acquisition, development and management of multifamily residential properties. Its segments include Boston, New York, Washington D.C., Southern California, San Francisco, Seattle and Other Markets. Southern California includes Los Angeles, San Diego and Orange County. Other Markets includes Phoenix. It is engaged in leasing of apartment units to residents. It focuses on rental apartment properties in urban and high-density suburban coastal gateway markets. As of December 31, 2016, the Company owned 302 properties located in 10 states and the District of Columbia consisting of 77,458 apartment units. The Company’s projects include The Alton, 455 Eye Street, 855 Brannan, Cascade, One Henry Adams, 340 Fremont and Vista 99. ERP Operating Limited Partnership (ERPOP) conducts the multifamily residential property business of Equity Residential.

About Silver Bay Realty Trust

Silver Bay Realty Trust Corp. is a real estate investment trust. It focuses on the acquisition, renovation, leasing and management of single-family properties in select markets in the United States. As of December 31, 2016, it had owned 9,044 single-family properties in Arizona, California, Florida, Georgia, Nevada, North Carolina, Ohio, South Carolina and Texas. Its investments in real estate consist of single-family properties located in various select markets, including Atlanta, Phoenix, Tampa, Charlotte, Orlando, Dallas, Jacksonville, Northern California, Las Vegas, Columbus, Tucson and Southeast Florida. The Charlotte market includes properties in South Carolina due to its proximity to Charlotte, North Carolina. The Northern California market consists of Contra Costa, Napa and Solano counties. The Southeast Florida market consists of Miami-Dade, Broward and Palm Beach counties. It conducts business and owns all of its properties through Silver Bay Operating Partnership L.P.

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