Comparing Equity Residential (NYSE:EQR) and Broadstone Net Lease (NYSE:BNL)

Broadstone Net Lease (NYSE:BNL) and Equity Residential (NYSE:EQR) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, risk, earnings and institutional ownership.

Valuation & Earnings

This table compares Broadstone Net Lease and Equity Residential”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadstone Net Lease	$431.80 million	8.20	$162.44 million	$0.47	39.80
Equity Residential	$2.98 billion	7.92	$1.04 billion	$3.03	20.48

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

Dividends

Broadstone Net Lease pays an annual dividend of $1.16 per share and has a dividend yield of 6.2%. Equity Residential pays an annual dividend of $2.77 per share and has a dividend yield of 4.5%. Broadstone Net Lease pays out 246.8% 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 91.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Broadstone Net Lease has increased its dividend for 4 consecutive years and Equity Residential has increased its dividend for 4 consecutive years.

Volatility & Risk

Broadstone Net Lease has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Institutional & Insider Ownership

89.1% of Broadstone Net Lease shares are owned by institutional investors. Comparatively, 92.7% of Equity Residential shares are owned by institutional investors. 1.0% of Broadstone Net Lease shares are owned by insiders. Comparatively, 1.0% of Equity Residential shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Broadstone Net Lease and Equity Residential’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Broadstone Net Lease	20.04%	2.93%	1.69%
Equity Residential	37.58%	10.30%	5.54%

Analyst Ratings

This is a breakdown of current ratings for Broadstone Net Lease and Equity Residential, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadstone Net Lease	0	3	9	0	2.75
Equity Residential	0	12	7	0	2.37

Broadstone Net Lease presently has a consensus price target of $19.91, indicating a potential upside of 6.44%. Equity Residential has a consensus price target of $69.95, indicating a potential upside of 12.71%. Given Equity Residential’s higher probable upside, analysts plainly believe Equity Residential is more favorable than Broadstone Net Lease.

Summary

Equity Residential beats Broadstone Net Lease on 10 of the 16 factors compared between the two stocks.

About Broadstone Net Lease

Broadstone Net Lease, Inc. (the Corporation) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (REIT) commencing with the taxable year ended December 31, 2008. Broadstone Net Lease, LLC (the Corporation’s operating company, or the OP), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties. The Corporation is the sole managing member of the OP. The membership units not owned by the Corporation are referred to as OP Units or non-controlling interests. As the Corporation conducts substantially all of its operations through the OP, it is structured as what is referred to as an umbrella partnership real estate investment trust (UPREIT). The Corporation’s common stock is listed on the New York Stock Exchange under the symbol BNL.

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.