UMH Properties (NYSE: UMH) and Starwood Waypoint Homes (NYSE:SFR) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.
Risk & Volatility
UMH Properties has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, Starwood Waypoint Homes has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.
Insider and Institutional Ownership
54.9% of UMH Properties shares are held by institutional investors. 11.6% of UMH Properties shares are held by company insiders. Comparatively, 5.0% of Starwood Waypoint Homes shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for UMH Properties and Starwood Waypoint Homes, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Starwood Waypoint Homes||0||4||6||0||2.60|
UMH Properties currently has a consensus target price of $18.60, indicating a potential upside of 25.93%. Starwood Waypoint Homes has a consensus target price of $37.50, indicating a potential upside of 1.00%. Given UMH Properties’ stronger consensus rating and higher probable upside, equities analysts clearly believe UMH Properties is more favorable than Starwood Waypoint Homes.
UMH Properties pays an annual dividend of $0.72 per share and has a dividend yield of 4.9%. Starwood Waypoint Homes pays an annual dividend of $0.88 per share and has a dividend yield of 2.4%. UMH Properties pays out -327.3% of its earnings in the form of a dividend. Starwood Waypoint Homes pays out -314.3% 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. UMH Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares UMH Properties and Starwood Waypoint Homes’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|UMH Properties||$99.21 million||5.20||$11.53 million||($0.22)||-67.13|
|Starwood Waypoint Homes||$575.68 million||8.28||-$81.26 million||($0.28)||-132.61|
UMH Properties has higher earnings, but lower revenue than Starwood Waypoint Homes. Starwood Waypoint Homes is trading at a lower price-to-earnings ratio than UMH Properties, indicating that it is currently the more affordable of the two stocks.
This table compares UMH Properties and Starwood Waypoint Homes’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Starwood Waypoint Homes||-7.41%||-1.07%||-0.47%|
UMH Properties beats Starwood Waypoint Homes on 12 of the 15 factors compared between the two stocks.
UMH Properties Company Profile
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 May 31, 2017, the Company owned 107 manufactured home communities consisting of approximately 19,400 developed sites. 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.
Starwood Waypoint Homes Company Profile
Starwood Waypoint Homes, formerly Colony Starwood Homes, is an internally managed real estate investment trust (REIT). The Company was formed primarily to acquire, renovate, lease and manage residential assets in select markets across the United States. It is focused on acquiring single-family rental (SFR) homes through a variety of channels, renovating these homes to the extent necessary and leasing them to qualified residents. The Company operates through two segments, which are represented by its portfolio of SFR homes and its portfolio of NPLs owned in the joint venture with Prime Asset Fund VI, LLC (Prime). The Company identifies and pursues individual home acquisition opportunities through various sources, including multiple listing services (MLS) listings, foreclosure auctions and short sales. As of December 31, 2016, its SFR portfolio consisted of 31,684 owned homes, including 31,065 rental homes and 619 homes that it does not intend to hold for the long term.
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