10 Best Residential Real Estate Stocks to Buy

2. Equity Residential (NYSE:EQR)

Number of Hedge Fund Holders: 36

Value of Hedge Fund Holdings: $867,147,000

Equity Residential (NYSE:EQR) specializes in acquiring, developing, and managing high-quality apartment properties in leading US growth markets. The company is headquartered in Chicago, Illinois, and ranks second on our list of the best residential real estate stocks to buy.

In Q1 2024, Equity Residential (NYSE:EQR) reported revenue of $730.82 million and a net income of $295.79 million, representing a year-over-year increase of over 34%. The net profit margin for this period was 40.47%. Moreover, the diluted earnings per share (EPS) saw an increase of over 37%, reaching $0.77.

Equity Residential (NYSE:EQR) has an average price target of $69.83, according to 14 Wall Street analysts’ 12-month forecasts issued in the past 3 months. The price targets range from a high of $75 to a low of $64. This average target suggests a potential increase of 6.14% from the current price of $65.79.

Here’s what Baron Funds said about Equity Residential (NYSE:EQR) in its Q4 2023 investor letter:

“In the most recent quarter, we re-acquired shares in Equity Residential (NYSE:EQR), the largest U.S. multi-family REIT. The company has assembled an excellent portfolio of Class A apartment buildings located in high barrier-to-entry coastal markets with favorable long-term demographic trends and muted overall supply growth. We believe the company is also well positioned to benefit from the affordability advantages of renting versus home ownership, annual leases that provide the potential for partial inflation protection, and its low levered balance sheet, which positions the company to take advantage of acquisition opportunities.

In our opinion, Equity Residential’s shares are attractively valued relative to private market values and the company owns and operates excellent and relevant real estate that should perform well, long term.”