Comparing First Real Estate Investment Trust of New Jersey (OTCMKTS:FREVS) and Equity Residential (NYSE:EQR)

First Real Estate Investment Trust of New Jersey (OTCMKTS:FREVS) and Equity Residential (NYSE:EQR) are both real estate companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Insider and Institutional Ownership

92.7% of Equity Residential shares are held by institutional investors. 12.0% of First Real Estate Investment Trust of New Jersey shares are held by insiders. Comparatively, 1.7% of Equity Residential shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares First Real Estate Investment Trust of New Jersey and Equity Residential’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Real Estate Investment Trust of New Jersey	N/A	N/A	N/A
Equity Residential	29.07%	7.43%	4.16%

Dividends

First Real Estate Investment Trust of New Jersey pays an annual dividend of $1.56 per share and has a dividend yield of 9.8%. Equity Residential pays an annual dividend of $2.70 per share and has a dividend yield of 4.4%. First Real Estate Investment Trust of New Jersey pays out 92.3% 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 122.7% 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 has increased its dividend for 3 consecutive years. First Real Estate Investment Trust of New Jersey is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares First Real Estate Investment Trust of New Jersey and Equity Residential’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Real Estate Investment Trust of New Jersey	N/A	N/A	N/A	$1.69	9.47
Equity Residential	$2.87 billion	8.05	$835.44 million	$2.20	27.72

Equity Residential has higher revenue and earnings than First Real Estate Investment Trust of New Jersey. First Real Estate Investment Trust of New Jersey is trading at a lower price-to-earnings ratio than Equity Residential, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for First Real Estate Investment Trust of New Jersey and Equity Residential, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Real Estate Investment Trust of New Jersey	0	0	0	0	N/A
Equity Residential	0	10	4	0	2.29

Equity Residential has a consensus price target of $65.32, indicating a potential upside of 7.10%. Given Equity Residential’s higher probable upside, analysts clearly believe Equity Residential is more favorable than First Real Estate Investment Trust of New Jersey.

Summary

Equity Residential beats First Real Estate Investment Trust of New Jersey on 10 of the 13 factors compared between the two stocks.

About First Real Estate Investment Trust of New Jersey

First Real Estate Investment Trust of New Jersey, Inc. is a publicly traded (over-the-counter symbol FREVS) REIT organized in 1961. Its portfolio of residential and commercial properties are located in New Jersey and New York, with the largest concentration in northern New Jersey.

About Equity Residential

Equity Residential is committed to creating communities where people thrive. The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract affluent long-term renters. Equity Residential owns or has investments in 305 properties consisting of 80,683 apartment units, with an established presence in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin.