Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Invitation Homes's Sloan Ratio for the quarter that ended in Sep. 2024 was -0.51%.
As of Sep. 2024, Invitation Homes has a Sloan Ratio of -0.51%, indicating the company is in the safe zone and there is no funny business with accruals.
Invitation Homes Sloan Ratio % Historical Data
The historical data trend for Invitation Homes's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Invitation Homes's Sloan Ratio %
For the REIT - Residential subindustry, Invitation Homes's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Invitation Homes's Sloan Ratio % Distribution in the REITs Industry
For the REITs industry and Real Estate sector, Invitation Homes's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Invitation Homes's Sloan Ratio % falls into.
Invitation Homes Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Invitation Homes's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Invitation Homes's Net Income for the trailing twelve months (TTM) ended in Sep. 2024 was 129.546 (Dec. 2023 ) + 142.35 (Mar. 2024 ) + 73.188 (Jun. 2024 ) + 95.269 (Sep. 2024 ) = $440 Mil.
Invitation Homes's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2024 was 87.544 (Dec. 2023 ) + 265.585 (Mar. 2024 ) + 369.797 (Jun. 2024 ) + 313.615 (Sep. 2024 ) = $1,037 Mil.
Invitation Homes's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2024 was -3.956 (Dec. 2023 ) + -24.896 (Mar. 2024 ) + -175.304 (Jun. 2024 ) + -292.497 (Sep. 2024 ) = $-497 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Invitation Homes (NYSE:INVH) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Sep. 2024, Invitation Homes has a Sloan Ratio of -0.51%, indicating the company is in the safe zone and there is no funny business with accruals.
Invitation Homes Sloan Ratio % Related Terms
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Invitation Homes owns a portfolio of nearly 85,000 single-family rental homes. The company focuses on owning homes in the starter and move-up segments of the housing market with an average sale price around $350,000 and generally less than 1,800 square feet. The portfolio is spread across 16 target markets that feature high employment and household formation growth with almost 70% of the portfolio in the Western U.S. and Florida; 15 of the 16 markets featuring average rents lower than homeownership costs.
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