United Dominion Realty Trust (NYSE: UDR) and Equity Residential (NYSE:EQR) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitability, dividends and valuation.

Insider & Institutional Ownership

97.7% of United Dominion Realty Trust shares are owned by institutional investors. Comparatively, 91.1% of Equity Residential shares are owned by institutional investors. 3.1% of United Dominion Realty Trust 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 large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares United Dominion Realty Trust and Equity Residential’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
United Dominion Realty Trust $979.22 million 10.60 $616.47 million $1.10 35.25
Equity Residential $2.43 billion 10.27 $1.57 billion $2.23 30.47

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

Analyst Recommendations

This is a summary of current recommendations and price targets for United Dominion Realty Trust and Equity Residential, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Dominion Realty Trust 2 8 3 0 2.08
Equity Residential 1 9 2 0 2.08

United Dominion Realty Trust currently has a consensus price target of $38.25, indicating a potential downside of 1.37%. Equity Residential has a consensus price target of $67.45, indicating a potential downside of 0.71%. Given Equity Residential’s stronger consensus rating and higher probable upside, analysts plainly believe Equity Residential is more favorable than United Dominion Realty Trust.

Volatility & Risk

United Dominion Realty Trust has a beta of 0.38, indicating that its share price is 62% less volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.34, indicating that its share price is 66% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
United Dominion Realty Trust 30.74% 10.40% 3.97%
Equity Residential 33.99% 7.92% 3.97%

Dividends

United Dominion Realty Trust pays an annual dividend of $1.24 per share and has a dividend yield of 3.2%. Equity Residential pays an annual dividend of $2.02 per share and has a dividend yield of 3.0%. United Dominion Realty Trust pays out 112.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Equity Residential pays out 90.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Equity Residential has raised its dividend for 7 consecutive years.

Summary

Equity Residential beats United Dominion Realty Trust on 9 of the 16 factors compared between the two stocks.

United Dominion Realty Trust Company Profile

UDR, Inc. is a self-administered real estate investment trust. The Company owns, operates, acquires, renovates, develops, redevelops, disposes of and manages multifamily apartment communities generally located in various markets across the United States. The Company’s segments are Same-Store Communities and Non-Mature Communities/Other. As of December 31, 2016, the Company’s consolidated real estate portfolio included 127 communities located in 18 markets, with a total of 39,454 completed apartment homes. As of December 31, 2016, the Company also had an ownership interest in 27 communities containing 6,849 apartment homes through unconsolidated joint ventures or partnerships. As of December 31, 2016, the Company’s properties were in various locations, such as Orange County, San Francisco and Los Angeles in California; Seattle, Washington; Richmond, Virginia; Baltimore, Maryland; Orlando and Tampa in Florida; Nashville, Tennessee, and Dallas and Austin in Texas.

Equity Residential Company Profile

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.

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