Contrasting Equinix (EQIX) & Equity Residential (EQR)

Equinix (NASDAQ:EQIX) and Equity Residential (NYSE:EQR) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.

Analyst Ratings

This is a summary of recent ratings for Equinix and Equity Residential, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equinix 0 1 18 0 2.95
Equity Residential 0 11 5 0 2.31

Equinix currently has a consensus target price of $512.05, suggesting a potential upside of 24.76%. Equity Residential has a consensus target price of $67.57, suggesting a potential upside of 5.47%. Given Equinix’s stronger consensus rating and higher possible upside, analysts plainly believe Equinix is more favorable than Equity Residential.

Dividends

Equinix pays an annual dividend of $9.12 per share and has a dividend yield of 2.2%. Equity Residential pays an annual dividend of $2.16 per share and has a dividend yield of 3.4%. Equinix pays out 49.2% of its earnings in the form of a dividend. Equity Residential pays out 69.0% 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. Equinix has raised its dividend for 2 consecutive years.

Institutional and Insider Ownership

97.4% of Equinix shares are owned by institutional investors. Comparatively, 87.3% of Equity Residential shares are owned by institutional investors. 0.5% of Equinix shares are owned by company insiders. Comparatively, 3.8% of Equity Residential shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Equinix and Equity Residential’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Equinix $4.37 billion 7.47 $232.98 million $18.53 22.15
Equity Residential $2.47 billion 9.55 $603.45 million $3.13 20.47

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

Profitability

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

Net Margins Return on Equity Return on Assets
Equinix 5.71% 7.22% 2.57%
Equity Residential 23.27% 5.63% 2.87%

Risk and Volatility

Equinix has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500.

Summary

Equinix beats Equity Residential on 11 of the 17 factors compared between the two stocks.

About Equinix

Equinix, Inc. (Nasdaq: EQIX) connects the world's leading businesses to their customers, employees and partners inside the most-interconnected data centers. In 52 markets across five continents, Equinix is where companies come together to realize new opportunities and accelerate their business, IT and cloud strategies.

About Equity Residential

Equity Residential is an S&P 500 company focused on the acquisition, development and management of rental apartment properties in urban and high-density suburban coastal gateway markets where today's renters want to live, work and play. Equity Residential owns or has investments in 304 properties consisting of 78,645 apartment units, primarily located in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California.

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