NYSE:AVB

Stock Analysis Report

Executive Summary

As of June 30, 2019, the Company owned or held a direct or indirect ownership interest in 294 apartment communities containing 86,184 apartment homes in 12 states and the District of Columbia, of which 21 communities were under development and seven communities were under redevelopment.

Snowflake

Fundamentals

Established dividend payer with questionable track record.


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


Market Performance


7 Day Return

-0.5%

AVB

-0.4%

US REITs

1.0%

US Market


1 Year Return

26.1%

AVB

20.9%

US REITs

6.7%

US Market

Return vs Industry: AVB exceeded the US REITs industry which returned 20.9% over the past year.

Return vs Market: AVB exceeded the US Market which returned 6.7% over the past year.


Share holder returns

AVBIndustryMarket
7 Day-0.5%-0.4%1.0%
30 Day5.3%2.0%-1.8%
90 Day3.4%4.0%-1.8%
1 Year30.1%26.1%26.3%20.9%9.1%6.7%
3 Year41.9%29.0%34.5%17.3%46.1%36.6%
5 Year69.2%45.0%64.8%29.9%66.9%48.6%

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 based on future cash flows and its price relative to the stock market?

32.99x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Undervalued: AVB ($218.08) is trading above our estimate of fair value ($206.97)

Significantly Undervalued: AVB is trading above our estimate of fair value.


Price Based on Earnings

PE vs Industry: AVB is good value based on its PE Ratio (33x) compared to the REITs industry average (34.8x).

PE vs Market: AVB is poor value based on its PE Ratio (33x) compared to the US market (17.5x).


Price Based on Expected Growth

Low PEG Ratio: AVB is poor value based on its PEG Ratio (21.7x)


Price Based on Value of Assets

PB vs Industry: AVB is overvalued based on its PB Ratio (2.8x) compared to the US REITs industry average (2x).


Next Steps

Future Growth

How is AvalonBay Communities expected to perform in the next 1 to 3 years based on estimates from 14 analysts?

1.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: AVB's forecast earnings growth (1.5% per year) is below the savings rate (2.7%).

Earnings vs Market: AVB's earnings (1.5% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: AVB's earnings are forecast to grow, but not significantly.

Revenue vs Market: AVB's revenue (5% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: AVB's revenue (5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: AVB's Return on Equity is forecast to be low in 3 years time (7%).


Next Steps

Past Performance

How has AvalonBay Communities performed over the past 5 years?

9.5%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: AVB's earnings have grown by 9.5% per year over the past 5 years.

Accelerating Growth: AVB's earnings growth over the past year (5.1%) is below its 5-year average (9.5% per year).

Earnings vs Industry: AVB earnings growth over the past year (5.1%) underperformed the REITs industry 17%.


Return on Equity

High ROE: AVB's Return on Equity (8.5%) is considered low.


Return on Assets

ROA vs Industry: AVB has a higher Return on Assets than the REITs industry average last year.


Return on Capital Employed

ROCE Improving: AVB's Return on Capital Employed has declined over the past 3 years.


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 0.1x 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?

2.90%

Expected Dividend Yield


Dividend Yield vs Market

company2.8%marketbottom25%1.5%markettop25%3.8%industryaverage4.4%forecastin3Years2.9%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: AVB's dividend (2.79%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: AVB's dividend (2.79%) is low compared to the top 25% of dividend payers in the US market (3.77%).

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 (65.9%), 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 (0.5% payout ratio).


Next Steps

Management

What is the CEO of AvalonBay Communities's salary, the management and board of directors tenure and is there insider trading?

7.5yrs

Average management tenure


CEO

Tim Naughton (58yo)

7.8yrs

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 ($USD10.08M) is about average for companies of similar size in the US market ($USD11.20M).

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


Management Age and Tenure

7.5yrs

Average Tenure

56yo

Average Age

Experienced Management: AVB's management team is seasoned and experienced (7.5 years average tenure).


Board Age and Tenure

4.9yrs

Average Tenure

60yo

Average Age

Experienced Board: AVB's board of directors are considered experienced (4.9 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$537,78605 Sep 19
William McLaughlin
EntityIndividual
Shares2,500
Max PriceUS$215.11
SellUS$277,71804 Sep 19
Edward Schulman
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares1,301
Max PriceUS$213.47
SellUS$428,00004 Sep 19
Leo Horey
EntityIndividual
Role
Chief Administrative Officer
Chief Administrative Officer
Shares2,000
Max PriceUS$214.00
SellUS$522,67312 Jun 19
William McLaughlin
EntityIndividual
Shares2,500
Max PriceUS$209.07
SellUS$1,049,27512 Jun 19
Leo Horey
EntityIndividual
Role
Chief Administrative Officer
Chief Administrative Officer
Shares5,000
Max PriceUS$210.00
SellUS$310,39610 Jun 19
Edward Schulman
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares1,500
Max PriceUS$206.93
SellUS$51,37228 May 19
Kevin O'Shea
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares250
Max PriceUS$205.49
SellUS$226,30308 May 19
Keri Shea
EntityIndividual
Shares1,131
Max PriceUS$200.09
SellUS$302,62706 May 19
Sean Breslin
EntityIndividual
Role
Chief Operating Officer
Chief Operating Officer
Shares1,500
Max PriceUS$201.75
SellUS$417,81715 Mar 19
Edward Schulman
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares2,100
Max PriceUS$198.96
SellUS$499,41014 Mar 19
William McLaughlin
EntityIndividual
Shares2,500
Max PriceUS$199.77
SellUS$4,354,23511 Mar 19
Timothy Naughton
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares22,164
Max PriceUS$197.00
SellUS$971,17811 Mar 19
Stephen Wilson
EntityIndividual
Role
Senior Key Executive
Consultant
Shares4,956
Max PriceUS$195.96
SellUS$981,15007 Mar 19
Kevin O'Shea
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares5,000
Max PriceUS$196.23
SellUS$688,13107 Mar 19
Sean Breslin
EntityIndividual
Role
Chief Operating Officer
Chief Operating Officer
Shares3,500
Max PriceUS$196.64
SellUS$980,50005 Mar 19
Leo Horey
EntityIndividual
Role
Chief Administrative Officer
Chief Administrative Officer
Shares5,000
Max PriceUS$197.00
SellUS$7,35206 Dec 18
Sean Breslin
EntityIndividual
Role
Chief Operating Officer
Chief Operating Officer
Shares39
Max PriceUS$188.50
SellUS$540,01027 Nov 18
Stephen Wilson
EntityIndividual
Role
Senior Key Executive
Consultant
Shares2,905
Max PriceUS$185.89
SellUS$347,98321 Nov 18
Keri Shea
EntityIndividual
Shares1,880
Max PriceUS$185.10
SellUS$373,76021 Nov 18
Leo Horey
EntityIndividual
Role
Chief Administrative Officer
Chief Administrative Officer
Shares2,000
Max PriceUS$186.88
SellUS$257,26420 Nov 18
Edward Schulman
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares1,400
Max PriceUS$183.76
SellUS$182,24009 Nov 18
Kevin O'Shea
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares1,000
Max PriceUS$182.24
SellUS$269,26507 Nov 18
Kevin O'Shea
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares1,500
Max PriceUS$179.51

Ownership Breakdown


Management Team

  • Tim Naughton (58yo)

    Chairman

    • Tenure: 7.8yrs
    • Compensation: US$10.08m
  • Leo Horey (56yo)

    Chief Administrative Officer

    • Tenure: 7.5yrs
    • Compensation: US$3.14m
  • Sean Breslin (52yo)

    Chief Operating Officer

    • Tenure: 4.8yrs
    • Compensation: US$3.49m
  • Ronald Ladell (57yo)

    Senior Vice President of Development - New Jersey

    • Tenure: 17.8yrs
  • Edward Schulman (56yo)

    Executive VP

    • Tenure: 20.7yrs
    • Compensation: US$1.06m
  • Steve Wilson (62yo)

    Consultant

    • Tenure: 0.3yrs
    • Compensation: US$2.53m
  • Kevin O'Shea (53yo)

    Chief Financial Officer

    • Tenure: 5.3yrs
    • Compensation: US$3.27m
  • Kurt Conway (59yo)

    Senior Vice President of Brand Strategy & Marketing

    • Tenure: 9.2yrs
  • Matt Birenbaum (53yo)

    Chief Investment Officer

    • Tenure: 4.8yrs
    • Compensation: US$3.45m
  • Jason Reilley

    Vice President of Investor Relations

    • Tenure: 0yrs

Board Members

  • H. Sarles (74yo)

    Independent Director

    • Tenure: 14.1yrs
    • Compensation: US$270.05k
  • Tim Naughton (58yo)

    Chairman

    • Tenure: 7.8yrs
    • Compensation: US$10.08m
  • Ron Havner (61yo)

    Independent Director

    • Tenure: 5.1yrs
    • Compensation: US$225.15k
  • Alan Buckelew (70yo)

    Independent Director

    • Tenure: 8.1yrs
    • Compensation: US$245.05k
  • Glyn Aeppel (60yo)

    Independent Director

    • Tenure: 6.4yrs
    • Compensation: US$240.05k
  • Ed Walter (63yo)

    Lead Independent Director

    • Tenure: 0.4yrs
    • Compensation: US$245.05k
  • Terry Brown (57yo)

    Independent Director

    • Tenure: 4.8yrs
    • Compensation: US$225.15k
  • Steve Hills (60yo)

    Independent Director

    • Tenure: 2.1yrs
    • Compensation: US$225.05k
  • Susan Swanezy (60yo)

    Independent Director

    • Tenure: 3.1yrs
    • Compensation: US$225.15k
  • Richard Lieb (59yo)

    Director

    • Tenure: 3.1yrs
    • Compensation: US$225.05k

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$30.386b
  • Market Cap: US$30.384b
  • Shares outstanding: 139.33m
  • 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

Biography

As of June 30, 2019, the Company owned or held a direct or indirect ownership interest in 294 apartment communities containing 86,184 apartment homes in 12 states and the District of Columbia, of which 21  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 01:07
End of Day Share Price2019/10/11 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.

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