NYSE:AVB

Stock Analysis Report

Executive Summary

As of December 31, 2019, the Company owned or held a direct or indirect ownership interest in 297 apartment communities containing 86,846 apartment homes in 11 states and the District of Columbia, of which 22 communities were under development and two communities were under redevelopment.

Rewards

Trading at 4.4% below its fair value

Pays a high and reliable dividend of 2.82%

Risk Analysis

Earnings are forecast to decline by an average of -0.01% per year for the next 3 years

Large one-off items impacting financial results



Snowflake Analysis

Established dividend payer and overvalued.


Similar Companies

Share Price & News

How has AvalonBay Communities's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AVB has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.09%

AVB

-0.5%

US REITs

0.5%

US Market


1 Year Return

15.3%

AVB

14.9%

US REITs

20.3%

US Market

Return vs Industry: AVB matched the US REITs industry which returned 14.9% over the past year.

Return vs Market: AVB underperformed the US Market which returned 20.3% over the past year.


Shareholder returns

AVBIndustryMarket
7 Day0.09%-0.5%0.5%
30 Day3.0%2.1%2.0%
90 Day6.9%6.5%9.4%
1 Year18.7%15.3%19.6%14.9%22.8%20.3%
3 Year35.9%23.6%36.4%19.3%50.1%40.4%
5 Year58.5%35.8%58.1%25.5%73.1%54.1%

Price Volatility Vs. Market

How volatile is AvalonBay Communities's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is AvalonBay Communities undervalued compared to its fair value and its price relative to the market?

4.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AVB ($225.8) is trading below our estimate of fair value ($236.14)

Significantly Below Fair Value: AVB is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: AVB is poor value based on its PE Ratio (40.1x) compared to the REITs industry average (36.3x).

PE vs Market: AVB is poor value based on its PE Ratio (40.1x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: AVB's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: AVB is overvalued based on its PB Ratio (2.9x) compared to the US REITs industry average (2.1x).


Next Steps

Future Growth

How is AvalonBay Communities forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

-0.01%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AVB's earnings are forecast to decline over the next 3 years (-0.01% per year).

Earnings vs Market: AVB's earnings are forecast to decline over the next 3 years (-0.01% per year).

High Growth Earnings: AVB's earnings are forecast to decline over the next 3 years.

Revenue vs Market: AVB's revenue (4.6% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: AVB's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AVB's Return on Equity is forecast to be low in 3 years time (7.9%).


Next Steps

Past Performance

How has AvalonBay Communities performed over the past 5 years?

4.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AVB has a large one-off gain of $178.0M impacting its December 31 2019 financial results.

Growing Profit Margin: AVB's current net profit margins (33.8%) are lower than last year (42.4%).


Past Earnings Growth Analysis

Earnings Trend: AVB's earnings have grown by 4.7% per year over the past 5 years.

Accelerating Growth: AVB's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AVB had negative earnings growth (-19.1%) over the past year, making it difficult to compare to the REITs industry average (6.9%).


Return on Equity

High ROE: AVB's Return on Equity (7.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is AvalonBay Communities's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: AVB has a high level of physical assets or inventory.

Debt Coverage by Assets: AVB's debt is not covered by short term assets (assets are 0x debt).


Financial Institutions Analysis

Asset Level: AVB's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if AVB has a sufficient allowance for bad loans.

Low Risk Liabilities: AVB reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if AVB has an acceptable proportion of non-loan assets held.

Low Risk Deposits: AVB has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if AVB has an appropriate level of bad loans.


Next Steps

Dividend

What is AvalonBay Communities's current dividend yield, its reliability and sustainability?

2.82%

Current Dividend Yield


Upcoming Dividend Payment

Purchase AvalonBay Communities before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.8%marketbottom25%1.4%markettop25%3.7%industryaverage3.5%forecastin3Years2.9%

Current dividend yield vs market & industry

Notable Dividend: AVB's dividend (2.82%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: AVB's dividend (2.82%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: AVB's dividends per share have been stable in the past 10 years.

Growing Dividend: AVB's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (64.9%), AVB's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AVB's dividends in 3 years are forecast to be thoroughly covered by earnings (0.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

9.5yrs

Average management tenure


CEO

Tim Naughton (58yo)

8.1yrs

Tenure

US$10,079,434

Compensation

Mr. Timothy J. Naughton, also known as Tim, has been the Chief Executive Officer of AvalonBay Communities Inc. since January 1, 2012 and has been its President since February 23, 2015. Mr. Naughton serves  ...


CEO Compensation Analysis

Compensation vs Market: Tim's total compensation ($USD10.08M) is about average for companies of similar size in the US market ($USD10.78M).

Compensation vs Earnings: Tim's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Timothy Naughton
Chairman8.1yrsUS$10.08m0.097% $30.9m
Kevin O'Shea
Chief Financial Officer5.7yrsUS$3.27m0.013% $4.3m
Sean Breslin
Chief Operating Officer5.1yrsUS$3.49m0.026% $8.3m
Matthew Birenbaum
Chief Investment Officer5.1yrsUS$3.45m0.034% $10.8m
Jason Reilley
Vice President of Investor Relations0yrsno datano data
Edward Schulman
Executive VP21yrsUS$1.06m0.013% $4.3m
Kurt Conway
Senior Vice President of Brand Strategy & Marketing9.5yrsno datano data
Ronald Ladell
Senior Vice President of Development - New Jersey18.1yrsno datano data
J. Morris
Head of Construction Group and Senior Vice President of Construction15yrsno datano data
William McLaughlin
Executive Vice President of Development - East Coast10yrsUS$1.65m0.034% $11.0m

9.5yrs

Average Tenure

56yo

Average Age

Experienced Management: AVB's management team is seasoned and experienced (9.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Timothy Naughton
Chairman8.1yrsUS$10.08m0.097% $30.9m
H. Sarles
Independent Director14.4yrsUS$270.05k0.012% $3.8m
Ronald Havner
Independent Director5.4yrsUS$225.15k0.0051% $1.6m
Alan Buckelew
Independent Director8.4yrsUS$245.05k0.0051% $1.6m
Glyn Aeppel
Independent Director6.8yrsUS$240.05kno data
W. Walter
Lead Independent Director0.8yrsUS$245.05k0.0043% $1.4m
Terry Brown
Independent Director5.1yrsUS$225.15k0.0048% $1.5m
Stephen Hills
Independent Director2.4yrsUS$225.05k0.00036% $115.2k
Susan Swanezy
Independent Director3.4yrsUS$225.15k0.0032% $1.0m
Richard Lieb
Independent Director3.4yrsUS$225.05k0.0020% $652.9k

5.3yrs

Average Tenure

60yo

Average Age

Experienced Board: AVB's board of directors are considered experienced (5.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: AVB insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

AvalonBay Communities, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: AvalonBay Communities, Inc.
  • Ticker: AVB
  • Exchange: NYSE
  • Founded: 1978
  • Industry: Residential REITs
  • Sector: Real Estate
  • Implied Market Cap: US$32.007b
  • Market Cap: US$31.687b
  • Shares outstanding: 140.34m
  • Website: https://www.avalonbay.com

Number of Employees


Location

  • AvalonBay Communities, Inc.
  • Ballston Tower
  • Suite 800
  • Arlington
  • Virginia
  • 22203
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AVBNYSE (New York Stock Exchange)YesCommon StockUSUSDMar 1994
WV8DB (Deutsche Boerse AG)YesCommon StockDEEURMar 1994
0HJOLSE (London Stock Exchange)YesCommon StockGBUSDMar 1994
AVBCWBAG (Wiener Boerse AG)YesCommon StockATEURMar 1994
WV8ETLX (Eurotlx)YesCommon StockITEURMar 1994
A1VB34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

Biography

As of December 31, 2019, the Company owned or held a direct or indirect ownership interest in 297 apartment communities containing 86,846 apartment homes in 11 states and the District of Columbia, of which 22 communities were under development and two communities were under redevelopment. The Company is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in leading metropolitan areas primarily in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest, and the Northern and Southern California regions of the United States. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 00:22
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.