Comparing Equity Residential (NYSE:EQR) & Clipper Realty (NYSE:CLPR)

Clipper Realty (NYSE:CLPR) and Equity Residential (NYSE:EQR) are both real estate companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Clipper Realty and Equity Residential, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clipper Realty	0	1	0	0	2.00
Equity Residential	0	14	8	1	2.43

Equity Residential has a consensus target price of $71.40, indicating a potential upside of 12.12%. Given Equity Residential’s stronger consensus rating and higher probable upside, analysts clearly believe Equity Residential is more favorable than Clipper Realty.

Earnings & Valuation

This table compares Clipper Realty and Equity Residential”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clipper Realty	$151.46 million	0.36	-$19.90 million	($0.93)	-3.58
Equity Residential	$3.13 billion	7.63	$1.12 billion	$2.30	27.69

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

Institutional & Insider Ownership

37.6% of Clipper Realty shares are held by institutional investors. Comparatively, 92.7% of Equity Residential shares are held by institutional investors. 54.6% of Clipper Realty shares are held by company insiders. Comparatively, 1.2% of Equity Residential shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Clipper Realty pays an annual dividend of $0.38 per share and has a dividend yield of 11.4%. Equity Residential pays an annual dividend of $2.81 per share and has a dividend yield of 4.4%. Clipper Realty pays out -40.9% of its earnings in the form of a dividend. Equity Residential pays out 122.2% 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 4 consecutive years. Clipper Realty is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Clipper Realty	-8.36%	N/A	-1.03%
Equity Residential	27.97%	8.06%	4.29%

Risk and Volatility

Clipper Realty has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Summary

Equity Residential beats Clipper Realty on 14 of the 18 factors compared between the two stocks.

About Clipper Realty

Clipper Realty Inc. (NYSE: CLPR) is a self-administered and self-managed real estate company that acquires, owns, manages, operates, and repositions multifamily residential and commercial properties in the New York metropolitan area, with a portfolio in Manhattan and Brooklyn.

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.