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ESS

Essex Property Trust NYSE:ESS Stock Report

Last Price

US$242.23

Market Cap

US$16.3b

7D

-2.4%

1Y

-25.7%

Updated

01 Oct, 2022

Data

Company Financials +
ESS fundamental analysis
Snowflake Score
Valuation5/6
Future Growth1/6
Past Performance2/6
Financial Health0/6
Dividends5/6

ESS Stock Overview

Essex Property Trust, Inc., an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets.

Essex Property Trust Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Essex Property Trust
Historical stock prices
Current Share PriceUS$242.23
52 Week HighUS$363.36
52 Week LowUS$236.01
Beta0.80
1 Month Change-9.62%
3 Month Change-9.19%
1 Year Change-25.73%
3 Year Change-26.69%
5 Year Change-5.75%
Change since IPO1,150.22%

Recent News & Updates

Sep 15

Essex Property Trust declares $2.20 dividend

Essex Property Trust (NYSE:ESS) declares $2.20/share quarterly dividend, in line with previous. Forward yield 3.37% Payable Oct. 14; for shareholders of record Sept. 30; ex-div Sept. 29. See ESS Dividend Scorecard, Yield Chart, & Dividend Growth.

Aug 21

Essex Property Trust: Another Beat-And-Raise Quarter

Back in January, I expected Apartment REITs like Essex Property Trust to outperform the REIT average. Thanks to the mad rush to high yield brought on by inflation, that hasn't happened. Essex Property Trust has been typical of Apartment REITs in its total return. The price movement, however, stands in sharp contrast to the company's performance. Essex just beat expectations and raised guidance for the second straight quarter. This article examines growth, balance sheet, dividend, and valuation metrics for this Cadillac of apartment REITs. Back in January, I expected apartment real estate investment trusts ("REITs") to outperform the REIT average. Thanks to the mad rush to high yield brought on by inflation, that hasn't happened. According to Hoya Capital Income Builder, the Apartment REIT sector's total return of (-14.62)% YTD slightly trails the Equity REIT Index of (-12.54)%. Hoya Capital Income Builder Essex Property Trust, Inc. (ESS) has been typical of Apartment REITs in its total return, losing (-14.0)% thus far this year. ESS Total Return Level data by YCharts The price movement, however, stands in sharp contrast to the company's performance. Essex just posted its second straight beat-and-raise quarter. This article examines growth, balance sheet, dividend, and valuation metrics for this Cadillac of apartment REITs. Meet the company Founded in 1971 and headquartered in San Mateo, California, Essex Property Trust owns 253 apartment communities in 8 major West Coast markets, totaling about 62,000 units. The company divides these into three regions: Northern California (85 communities) Southern California (104 communities), and Seattle Metro (59 communities). In a recent article, I went into considerable detail about this company. For the sake of this article, suffice it to say Essex deals in high-end apartments (average rent near $2800 per month), and is benefitting from the return to office of high-tech workers displaced by the pandemic. Company investor presentation The West Coast states of California, Oregon, and Washington have higher-than-average GDP and job growth. At the same time, restricted supply due to high barriers to entry and demanding regulations drives up the rent on existing apartments. Still, purchasing a house on the West Coast costs more than double the cost of renting. Company investor presentation Essex is riding a wave of superior job growth in its West Coast markets, that started in the latter half of 2021, and continues to this day. Company investor presentation This is also reflected in the massive increase in job openings in the top 10 tech companies California and Washington. Prior to the pandemic, this was running between 25,000 and 30,000. COVID cut that to less than 20,000. By May of this year, it was over 50,000. Company investor presentation Quarterly Results Essex beat expectations and raised guidance in Q1 2022. Here are the highlights for Q2, reported July 26: FFO was up 1.3% QoQ (quarter-over-quarter), and 2.5% YoY. Core FFO was up a whopping 21.1% QoQ and 15.4% YoY. Net income declined 13.0% QoQ, and 44.3% YoY, mostly because of unrealized losses on "non-core co-investments" the company made. Company Q2 2022 earnings release Same-property revenues rose 4.8% QoQ and 12.7% YoY Same-property NOI (net operating income) rose 8.0% QoQ, and 16.7% YoY Same-store gains were shared by all three Essex regions, but the biggest gain was in the biggest segment, Southern California, at 14.5%. Company Q2 earnings release Each and every one of Essex' markets saw significant same-store gains, but they were heaviest in Los Angeles County, with 18.8%. Company Q2 earnings release This happened in spite of slightly lower occupancy. Company Q2 earnings release That can only mean leasing spreads were very favorable. In fact, net effective rents have increased between 18% and 20% year-to-date, according to CEO Michael Schall, on the earnings call, with Q3 renewals coming in at about 10%. Loss-to-lease stands at 10.3% and growing. The company raised full-year guidance for full-year Core FFO by 2%, to $14.45 at the midpoint. The company also raised full-year guidance for full-year NOI by 1.4%, to 13.5% at the midpoint. It was not a pure beat-and-raise, however, because Essex also lowered its guidance for full-year net income and total FFO, due primarily to the unrealized losses on their investments in Q2. (I would love to know what they invested in, that lost that much money, wouldn't you? Unfortunately, none of the analysts on the earnings call asked that question.) The company also trimmed back their planned acquisitions for H2 2022 by a whopping $275 million (45% decrease), their targeted dispositions by $50 million (25% decrease), and their planned preferred equity redemptions by $25 million (10% decrease). Company Q2 2022 earnings release Essex repurchased 219,000 shares of common stock totaling $60.8 million, at an average of $277.81 per share. (ESS still has $153.6 million in purchase authority remaining, but CFO Barbara Pak said any cash for buying back more shares would come from dispositions only, and those plans have been trimmed back, as shown in the figure above.) Essex completed stabilization of a 107-unit apartment complex in San Mateo. Growth metrics Here are the 3-year growth figures for FFO (funds from operations), TCFO (total cash from operations), and market cap. Metric 2019 2020 2021 2022* 3-year CAGR FFO (millions) $936 $865 $941 $877 -- FFO Growth % -- (-7.6) 8.8 (-6.8) (-2.15)% FFO per share $13.38 $12.82 $12.49 $14.45 -- FFO per share growth % -- (-4.2) (-2.6) 15.7 2.60% TCFO (millions) $919 $803 $905 $1,020 -- TCFO Growth % -- (-12.4) 12.7 12.7 3.54%

Shareholder Returns

ESSUS REITsUS Market
7D-2.4%-4.1%-2.5%
1Y-25.7%-20.4%-23.2%

Return vs Industry: ESS underperformed the US REITs industry which returned -20.4% over the past year.

Return vs Market: ESS underperformed the US Market which returned -23.2% over the past year.

Price Volatility

Is ESS's price volatile compared to industry and market?
ESS volatility
ESS Average Weekly Movement3.2%
REITs Industry Average Movement4.2%
Market Average Movement6.8%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

Stable Share Price: ESS is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: ESS's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19711,748Mike Schallhttps://www.essexapartmenthomes.com

Essex Property Trust, Inc., an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets. Essex currently has ownership interests in 246 apartment communities comprising approximately 60,000 apartment homes with an additional 6 properties in various stages of active development.

Essex Property Trust Fundamentals Summary

How do Essex Property Trust's earnings and revenue compare to its market cap?
ESS fundamental statistics
Market CapUS$16.33b
Earnings (TTM)US$385.57m
Revenue (TTM)US$1.61b

40.9x

P/E Ratio

9.8x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
ESS income statement (TTM)
RevenueUS$1.61b
Cost of RevenueUS$495.56m
Gross ProfitUS$1.11b
Other ExpensesUS$724.44m
EarningsUS$385.57m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)5.92
Gross Margin69.14%
Net Profit Margin24.01%
Debt/Equity Ratio99.5%

How did ESS perform over the long term?

See historical performance and comparison

Dividends

3.6%

Current Dividend Yield

58%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is ESS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ESS?

Other financial metrics that can be useful for relative valuation.

ESS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue13.7x
Enterprise Value/EBITDA20.9x
PEG Ratio2.8x

Price to Earnings Ratio vs Peers

How does ESS's PE Ratio compare to its peers?

ESS PE Ratio vs Peers
The above table shows the PE ratio for ESS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average48.6x
MAA Mid-America Apartment Communities
30.5x0.8%US$18.4b
UDR UDR
90.6x27.6%US$14.4b
INVH Invitation Homes
59.4x13.5%US$20.7b
AMH American Homes 4 Rent
58x8.6%US$13.1b
ESS Essex Property Trust
40.9x14.8%US$16.3b

Price-To-Earnings vs Peers: ESS is good value based on its Price-To-Earnings Ratio (40.9x) compared to the peer average (48.6x).


Price to Earnings Ratio vs Industry

How does ESS's PE Ratio compare vs other companies in the US REITs Industry?

Price-To-Earnings vs Industry: ESS is expensive based on its Price-To-Earnings Ratio (40.9x) compared to the US REITs industry average (25.8x)


Price to Earnings Ratio vs Fair Ratio

What is ESS's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ESS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio40.9x
Fair PE Ratio46.9x

Price-To-Earnings vs Fair Ratio: ESS is good value based on its Price-To-Earnings Ratio (40.9x) compared to the estimated Fair Price-To-Earnings Ratio (46.9x).


Share Price vs Fair Value

What is the Fair Price of ESS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ESS ($242.23) is trading below our estimate of fair value ($481.25)

Significantly Below Fair Value: ESS is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is Essex Property Trust forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


14.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ESS's forecast earnings growth (14.8% per year) is above the savings rate (1.9%).

Earnings vs Market: ESS's earnings (14.8% per year) are forecast to grow slower than the US market (14.8% per year).

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

Revenue vs Market: ESS's revenue (5% per year) is forecast to grow slower than the US market (7.7% per year).

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


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ESS's Return on Equity is forecast to be low in 3 years time (10.2%).


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Past Performance

How has Essex Property Trust performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


1.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ESS has high quality earnings.

Growing Profit Margin: ESS's current net profit margins (24%) are lower than last year (26.8%).


Past Earnings Growth Analysis

Earnings Trend: ESS's earnings have grown by 1.2% per year over the past 5 years.

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

Earnings vs Industry: ESS had negative earnings growth (-4.3%) over the past year, making it difficult to compare to the REITs industry average (45.8%).


Return on Equity

High ROE: ESS's Return on Equity (6.8%) is considered low.


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Financial Health

How is Essex Property Trust's financial position?

Financial Health Score

0/6

Financial Health Score 0/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: ESS's short term assets ($287.8M) do not cover its short term liabilities ($438.4M).

Long Term Liabilities: ESS's short term assets ($287.8M) do not cover its long term liabilities ($6.1B).


Debt to Equity History and Analysis

Debt Level: ESS's net debt to equity ratio (98.9%) is considered high.

Reducing Debt: ESS's debt to equity ratio has increased from 87.4% to 99.5% over the past 5 years.

Debt Coverage: ESS's debt is not well covered by operating cash flow (16.4%).

Interest Coverage: ESS's interest payments on its debt are not well covered by EBIT (2.8x coverage).


Balance Sheet


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Dividend

What is Essex Property Trust current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


3.63%

Current Dividend Yield

Dividend Yield vs Market

Essex Property Trust Dividend Yield vs Market
How does Essex Property Trust dividend yield compare to the market?
SegmentDividend Yield
Company (Essex Property Trust)3.6%
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (REITs)4.1%
Analyst forecast in 3 Years (Essex Property Trust)3.9%

Notable Dividend: ESS's dividend (3.63%) is higher than the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: ESS's dividend (3.63%) is low compared to the top 25% of dividend payers in the US market (4.73%).


Stability and Growth of Payments

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

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


Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (57.9%), ESS's dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (60.1%), ESS's dividend payments are covered by cash flows.


Discover strong dividend paying companies

Management

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

2.7yrs

Average management tenure


CEO

Mike Schall (65 yo)

28.67yrs

Tenure

US$7,183,068

Compensation

Mr. Michael J. Schall, also known as Mike, CPA, has been the Chief Executive Officer and President of Essex Property Trust, Inc., the general partner of Essex Portfolio, L.P. since January 1, 2011. He was...


CEO Compensation Analysis

Mike Schall's Compensation vs Essex Property Trust Earnings
How has Mike Schall's remuneration changed compared to Essex Property Trust's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$386m

Mar 31 2022n/an/a

US$393m

Dec 31 2021US$7mUS$900k

US$489m

Sep 30 2021n/an/a

US$447m

Jun 30 2021n/an/a

US$403m

Mar 31 2021n/an/a

US$422m

Dec 31 2020US$7mUS$900k

US$569m

Sep 30 2020n/an/a

US$602m

Jun 30 2020n/an/a

US$628m

Mar 31 2020n/an/a

US$635m

Dec 31 2019US$6mUS$800k

US$439m

Sep 30 2019n/an/a

US$428m

Jun 30 2019n/an/a

US$410m

Mar 31 2019n/an/a

US$418m

Dec 31 2018US$5mUS$800k

US$390m

Sep 30 2018n/an/a

US$376m

Jun 30 2018n/an/a

US$375m

Mar 31 2018n/an/a

US$345m

Dec 31 2017US$5mUS$700k

US$433m

Sep 30 2017n/an/a

US$525m

Jun 30 2017n/an/a

US$511m

Mar 31 2017n/an/a

US$512m

Dec 31 2016US$4mUS$650k

US$411m

Sep 30 2016n/an/a

US$295m

Jun 30 2016n/an/a

US$272m

Mar 31 2016n/an/a

US$245m

Dec 31 2015US$4mUS$550k

US$227m

Compensation vs Market: Mike's total compensation ($USD7.18M) is below average for companies of similar size in the US market ($USD13.04M).

Compensation vs Earnings: Mike's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: ESS's management team is considered experienced (2.7 years average tenure).


Board Members

Experienced Board: ESS's board of directors are considered experienced (8.4 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

What is the ownership structure of ESS?
Owner TypeNumber of SharesOwnership Percentage
State or Government28,3910.04%
Private Companies170,1520.3%
Individual Insiders475,2650.7%
General Public2,296,9963.5%
Institutions62,153,55195.4%

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


Top Shareholders

Top 25 shareholders own 69.64% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
16.36%
The Vanguard Group, Inc.
10,652,147$2.6b0.35%0.06%
9.87%
BlackRock, Inc.
6,428,061$1.6b-0.29%0.04%
7.99%
State Street Global Advisors, Inc.
5,203,282$1.3b-0.31%0.07%
4.62%
Principal Global Investors, LLC
3,008,123$728.7m3.31%0.51%
4.42%
Cohen & Steers Capital Management, Inc.
2,879,490$697.5m-42.94%1.43%
3.14%
Norges Bank Investment Management
2,046,993$495.8m0%0.07%
2.27%
Geode Capital Management, LLC
1,475,827$357.5m1.91%0.05%
2.15%
Resolution Capital Limited
1,400,828$339.3m-15.16%5.02%
1.88%
FMR LLC
1,224,430$296.6m-4.49%0.03%
1.67%
T. Rowe Price Group, Inc.
1,086,701$263.2m-2.81%0.03%
1.51%
Legal & General Investment Management Limited
985,200$238.6m5.92%0.07%
1.51%
Dimensional Fund Advisors LP
984,883$238.6m-1.35%0.06%
1.47%
Northern Trust Global Investments
956,734$231.7m-13.35%0.05%
1.44%
Boston Partners Global Investors, Inc.
939,935$227.7m2.98%0.19%
1.12%
UBS Asset Management
729,458$176.7m-3.67%0.03%
0.96%
Charles Schwab Investment Management, Inc.
624,737$151.3m-1.06%0.04%
0.93%
Teachers Insurance and Annuity Association-College Retirement Equities Fund
608,653$147.4m-6.29%0.05%
0.91%
Invesco Capital Management LLC
594,152$143.9m148.03%0.11%
0.87%
BNY Mellon Asset Management
569,548$138.0m3.52%0.03%
0.85%
Nikko Asset Management Co., Ltd.
552,854$133.9m18.57%0.06%
0.78%
Millennium Management LLC
509,584$123.4m380.92%0.16%
0.77%
Daiwa Asset Management Co. Ltd.
499,346$121.0m-38.86%0.12%
0.76%
ProShare Advisors LLC
492,730$119.4m0.65%0.4%
0.7%
J.P. Morgan Asset Management, Inc.
457,681$110.9m-21.61%0.02%
0.68%
Brookfield Asset Management Inc.
439,764$106.5m4.36%0.29%

Company Information

Essex Property Trust, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Essex Property Trust, Inc.
  • Ticker: ESS
  • Exchange: NYSE
  • Founded: 1971
  • Industry: Residential REITs
  • Sector: Real Estate
  • Implied Market Cap: US$16.326b
  • Market Cap: US$15.775b
  • Shares outstanding: 67.40m
  • Website: https://www.essexapartmenthomes.com

Number of Employees


Location

  • Essex Property Trust, Inc.
  • 1100 Park Place
  • Suite 200
  • San Mateo
  • California
  • 94403
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ESSNYSE (New York Stock Exchange)YesCommon StockUSUSDJun 1994
EXPDB (Deutsche Boerse AG)YesCommon StockDEEURJun 1994
EXPXTRA (XETRA Trading Platform)YesCommon StockDEEURJun 1994
0IIRLSE (London Stock Exchange)YesCommon StockGBUSDJun 1994
E1SS34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 10 REPR 1 COMBRBRLJan 2020

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/10/01 00:00
End of Day Share Price2022/09/30 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


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.