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UMH Properties: Secure 5% Dividend And A 62% P/FFO Discount To Its Peers

Published Fri, 08 Nov 2019 11:51:31 -0500 on Seeking Alpha

UMH Properties (UMH) is a small-cap equity REIT that owns and operates a portfolio of 122 manufactured home communities with approximately 23,000 developed homesites. These communities are located in eight states throughout the Northeast: New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan and Maryland. The company is a great investment for dividend-oriented investors whose goal is to receive a yield in the 4-6% range backed by strong underlying fundamentals that, in the meantime, provide opportunity for notable capital gains.
Favorable U.S. Housing Trends
For a company to achieve above-average growth in the long run, the existence of secular tailwinds is vital. Otherwise, if the opposite is the case then it might get really hard to increase or even sustain the top-line figure. Retail, paper industry, DVD rentals, and oil and gas industries are all good examples of what happens to companies' share prices if the industry is in decline.

Source: UMH
UMH is well-positioned to enjoy a significant boost to its future growth. As you can see in the graph above, housing has not yet recovered from the financial crisis 2008. Single-family housing starts have been gradually coming back to previous levels, but there is still a long way to go. Manufactured housing shipments, which are super relevant for UMH, show the same pattern - slowly but steadily regaining the pre-crisis level.
Here is a great excerpt from the recent Wells Fargo special commentary... Read more