Contrasting UMH Properties (UMH) & American Homes 4 Rent (AMH)

UMH Properties (NYSE: UMH) and American Homes 4 Rent (NYSE:AMH) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, profitability, institutional ownership and valuation.

Profitability

This table compares UMH Properties and American Homes 4 Rent’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
UMH Properties 1.05% 0.74% 0.16%
American Homes 4 Rent 6.56% 1.15% 0.75%

Volatility & Risk

UMH Properties has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500. Comparatively, American Homes 4 Rent has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500.

Dividends

UMH Properties pays an annual dividend of $0.72 per share and has a dividend yield of 5.1%. American Homes 4 Rent pays an annual dividend of $0.20 per share and has a dividend yield of 1.0%. UMH Properties pays out -327.3% of its earnings in the form of a dividend. American Homes 4 Rent pays out -2,000.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Earnings and Valuation

This table compares UMH Properties and American Homes 4 Rent’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
UMH Properties $99.21 million 4.98 $11.53 million ($0.22) -64.27
American Homes 4 Rent $878.89 million 6.66 $6.69 million ($0.01) -2,041.00

UMH Properties has higher earnings, but lower revenue than American Homes 4 Rent. American Homes 4 Rent is trading at a lower price-to-earnings ratio than UMH Properties, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

54.9% of UMH Properties shares are held by institutional investors. Comparatively, 88.2% of American Homes 4 Rent shares are held by institutional investors. 11.6% of UMH Properties shares are held by insiders. Comparatively, 27.8% of American Homes 4 Rent shares are held 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.

Analyst Ratings

This is a breakdown of recent recommendations for UMH Properties and American Homes 4 Rent, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UMH Properties 0 0 6 0 3.00
American Homes 4 Rent 0 1 8 0 2.89

UMH Properties currently has a consensus target price of $18.60, indicating a potential upside of 31.54%. American Homes 4 Rent has a consensus target price of $25.22, indicating a potential upside of 23.58%. Given UMH Properties’ stronger consensus rating and higher possible upside, equities research analysts plainly believe UMH Properties is more favorable than American Homes 4 Rent.

Summary

American Homes 4 Rent beats UMH Properties on 11 of the 16 factors compared between the two stocks.

About UMH Properties

UMH Properties, Inc. (UMH) is a real estate investment trust (REIT). The Company’s primary business is the ownership and operation of manufactured home communities, including leasing manufactured home sites to private manufactured home owners. The Company also leases homes to residents, and through its taxable REIT subsidiary, UMH Sales and Finance, Inc. (S&F), conducts manufactured home sales in its communities. As of December 22, 2017, the Company owned 112 manufactured home communities consisting of approximately 20,000 developed homesites. The communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana and Michigan. In connection with the operation of its communities, UMH also leases homes to prospective tenants. As of December 31, 2016, UMH owned a total of 4,700 rental homes, representing approximately 26% of its developed sites. These rental homes are owned by the Company and rented to residents.

About American Homes 4 Rent

American Homes 4 Rent is an internally managed real estate investment trust (REIT) focused on acquiring, renovating, leasing and operating single-family homes as rental properties. The Company’s primary objective is to generate attractive risk-adjusted returns for its shareholders through dividends and capital appreciation by acquiring, renovating, leasing and operating single-family homes as rental properties. As of December 31, 2016, it owned 48,422 single-family properties in 22 states, including 1,119 properties held for sale, and had an additional 47 properties in escrow that it intended to acquire. Its integrated operating platform offers property management, acquisitions, construction, marketing, leasing, financial and administrative functions. The Company may seek to invest in condominium units, townhouses and real estate-related debt investments. The Company is externally managed and advised by American Homes 4 Rent Advisor, LLC (the Advisor).

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