Gadsden Properties (OTCMKTS:GADS) and Equity Residential (NYSE:EQR) Critical Contrast

Gadsden Properties (OTCMKTS:GADS) and Equity Residential (NYSE:EQR) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Insider and Institutional Ownership

92.7% of Equity Residential shares are held by institutional investors. 5.0% of Gadsden Properties shares are held by insiders. Comparatively, 1.1% of Equity Residential shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Gadsden Properties	N/A	N/A	N/A
Equity Residential	33.22%	9.05%	4.85%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gadsden Properties	N/A	N/A	N/A	N/A	N/A
Equity Residential	$3.04 billion	7.95	$1.04 billion	$2.65	23.92

Equity Residential has higher revenue and earnings than Gadsden Properties.

Risk and Volatility

Gadsden Properties has a beta of -8.02, indicating that its share price is 902% less volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Gadsden Properties and Equity Residential, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gadsden Properties	0	0	0	0	0.00
Equity Residential	0	10	7	0	2.41

Equity Residential has a consensus target price of $73.57, indicating a potential upside of 16.04%. Given Equity Residential’s stronger consensus rating and higher possible upside, analysts clearly believe Equity Residential is more favorable than Gadsden Properties.

Summary

Equity Residential beats Gadsden Properties on 9 of the 10 factors compared between the two stocks.

About Gadsden Properties

Gadsden Properties, Inc. is a Nevada corporation that was formed on December 28, 2010. Gadsden concentrates primarily on investments in high quality income-producing assets, residential developments and other opportunistic commercial properties in secondary and tertiary markets across the United States. The Company derives value from smaller, flexible retail investments that range from $5 million to $50 million and off-market mixed-use properties ranging from $50 million to $250 million. As a result of this chosen strategy, we believe that Gadsden is developing a unique competitive advantage that generally allows the Company to invest in markets and assets that are often overlooked by larger institutional investors, such as publicly-traded REITs and other large institutional investors. As part of its strategy, Gadsden attracts specific sellers that prefer the tax deferral advantages offered through issuing operating partnership units in exchange for their properties. These real estate assets are typically operated by independent owners that are seeking to monetize their real estate holdings, and who are typically not well capitalized or well-seasoned real estate operators. These transactions create a variety of outcomes for Gadsden and the sellers typically resulting in lease-up and value-added opportunities that may not be otherwise achieved.

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.