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

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

Risk and Volatility

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

Profitability

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

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

Institutional and Insider Ownership

92.7% of Equity Residential shares are owned by institutional investors. Comparatively, 37.6% of Clipper Realty shares are owned by institutional investors. 1.2% of Equity Residential shares are owned by insiders. Comparatively, 54.6% of Clipper Realty shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

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

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

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equity Residential	$3.13 billion	7.63	$1.12 billion	$2.30	27.69
Clipper Realty	$153.20 million	0.36	-$19.90 million	($0.93)	-3.68

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.

Dividends

Equity Residential pays an annual dividend of $2.81 per share and has a dividend yield of 4.4%. Clipper Realty pays an annual dividend of $0.38 per share and has a dividend yield of 11.1%. 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. Clipper Realty pays out -40.9% of its earnings in the form of a dividend. 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.

Summary

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

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.

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.