UMH Properties, Inc. (UMH) Bundle
Understanding UMH Properties, Inc. (UMH) Revenue Streams
Understanding UMH Properties, Inc. Revenue Streams
The primary sources of revenue for UMH Properties, Inc. include rental and related income from manufactured home communities and sales of manufactured homes.
Breakdown of Primary Revenue Sources
- Rental and Related Income: Increased by 8% from $48.1 million for the three months ended September 30, 2023 to $51.9 million for the three months ended September 30, 2024.
- Sales of Manufactured Homes: Increased by 10% from $7.9 million (90 homes) for the three months ended September 30, 2023 to $8.7 million (100 homes) for the three months ended September 30, 2024.
Year-over-Year Revenue Growth Rate
For the nine months ended September 30, 2024, rental and related income increased by 9% from $140.5 million in 2023 to $153.8 million in 2024.
Contribution of Different Business Segments to Overall Revenue
| Revenue Source | Three Months Ended September 30, 2024 (in millions) | Three Months Ended September 30, 2023 (in millions) | Change (%) |
|---|---|---|---|
| Rental and Related Income | $51.9 | $48.1 | +8% |
| Sales of Manufactured Homes | $8.7 | $7.9 | +10% |
| Total Revenue | $60.6 | $56.0 | +8.21% |
Analysis of Significant Changes in Revenue Streams
The increase in rental and related income can be attributed to rising rental rates and improved occupancy. The company has been increasing rental rates by approximately 5% to 6% annually. Similarly, the sales of manufactured homes have shown resilience, indicating a strong demand for affordable housing despite market challenges.
For the nine months ended September 30, 2024, sales of manufactured homes rose by 6% from $23.4 million (264 homes) in 2023 to $24.9 million (300 homes) in 2024.
Community Net Operating Income (NOI)
Community NOI increased by 7% from $27.5 million for the three months ended September 30, 2023 to $29.4 million for the same period in 2024. For the nine months, Community NOI increased by 11% from $79.7 million to $88.6 million.
The operating expense ratio for community operations was 43.3% for the three months ended September 30, 2024, compared to 42.9% for the same period in 2023, suggesting improved operational efficiency as occupancy rates increase.
A Deep Dive into UMH Properties, Inc. (UMH) Profitability
A Deep Dive into UMH Properties, Inc.'s Profitability
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit percentage was 38%, compared to 33% for the same period in 2023. For the nine months ended September 30, 2024, the gross profit percentage was 34%, up from 31% in 2023.
Operating Profit Margin: Community Net Operating Income (NOI) for the three months ended September 30, 2024, was $29.4 million, reflecting a 7% increase from $27.5 million in 2023. For the nine months ended September 30, 2024, NOI increased by 11% to $88.6 million, from $79.7 million in 2023.
Net Profit Margin: The net income for the nine months ended September 30, 2024, was reported at $16.5 million, compared to a net loss of $3.4 million for the same period in 2023.
Trends in Profitability Over Time
Rental and related income increased 8% from $48.1 million for the three months ended September 30, 2023, to $51.9 million in 2024. For the nine months, this income rose 9%, from $140.5 million to $153.8 million.
Comparison of Profitability Ratios with Industry Averages
| Metric | UMH Properties 2024 | Industry Average |
|---|---|---|
| Gross Profit Margin | 38% | 35% |
| Operating Profit Margin | 18% | 15% |
| Net Profit Margin | 10% | 8% |
Analysis of Operational Efficiency
The operating expense ratio improved to 43.3% for the three months ended September 30, 2024, from 42.9% in the same period of 2023. For the nine months, the ratio decreased from 43.3% to 42.4%.
General and administrative expenses increased 5% year-over-year, from $14.7 million to $15.3 million for the nine months ended September 30, 2024. However, as a percentage of gross revenue, these expenses decreased from 8.6% to 8.3%.
Depreciation expense rose 8% from $41.3 million for the nine months ended September 30, 2023, to $44.4 million in 2024.
Community NOI Calculation:
| Period | Rental and Related Income | Community Operating Expenses | Community NOI |
|---|---|---|---|
| Three Months Ended 9/30/2024 | $51.9 million | $22.5 million | $29.4 million |
| Three Months Ended 9/30/2023 | $48.1 million | $20.7 million | $27.5 million |
| Nine Months Ended 9/30/2024 | $153.8 million | $65.2 million | $88.6 million |
| Nine Months Ended 9/30/2023 | $140.5 million | $60.8 million | $79.7 million |
Debt vs. Equity: How UMH Properties, Inc. (UMH) Finances Its Growth
Debt vs. Equity: How UMH Properties, Inc. Finances Its Growth
UMH Properties, Inc. maintains a balanced debt and equity structure to support its growth and operational needs. As of September 30, 2024, the company reported total assets of $1.5 billion and total liabilities of $643.1 million.
Overview of the Company’s Debt Levels
As of September 30, 2024, UMH Properties, Inc. had total mortgages payable, net of unamortized debt issuance costs, amounting to $421.7 million, reflecting a 2% decrease of $8.2 million due to principal payments. The company also reported loans payable, net of unamortized debt issuance costs, of $26.2 million, which represents a significant decrease of 72% or $67.5 million.
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio for UMH Properties, Inc. as of September 30, 2024, was approximately 0.75. This ratio is favorable when compared to the average debt-to-equity ratio of the real estate industry, which typically ranges from 0.80 to 1.00. The company's net debt to total market capitalization was about 22%, indicating a conservative leverage position.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In 2024, UMH Properties, Inc. expanded its unsecured revolving credit facility from $180 million to $260 million. The company had eighteen mortgages totaling $84.4 million due within the next 12 months, and twenty-four mortgages totaling $120.8 million due within the next 18 months. The weighted average interest rate on total debt declined from 4.7% at September 30, 2023, to 4.4% at September 30, 2024.
How the Company Balances Between Debt Financing and Equity Funding
UMH Properties, Inc. employs a mix of debt and equity financing to optimize its capital structure. In the nine months ended September 30, 2024, the company raised $166.0 million in gross proceeds from the sale of common stock through At-The-Market Programs. Additionally, the company reported dividends paid on common stock totaled $45.3 million and $14.2 million for Series D Preferred Stock.
| Financial Metrics | Amount (in millions) |
|---|---|
| Total Assets | $1,500 |
| Total Liabilities | $643.1 |
| Mortgages Payable | $421.7 |
| Loans Payable | $26.2 |
| Debt-to-Equity Ratio | 0.75 |
| Net Debt to Total Market Capitalization | 22% |
| Gross Proceeds from Common Stock Sales | $166.0 |
| Dividends Paid on Common Stock | $45.3 |
| Dividends Paid on Series D Preferred Stock | $14.2 |
Assessing UMH Properties, Inc. (UMH) Liquidity
Assessing UMH Properties, Inc. Liquidity
Current and Quick Ratios
The current ratio for UMH Properties, Inc. as of September 30, 2024, is 2.02, indicating a strong liquidity position. The quick ratio, which excludes inventory from current assets, stands at 1.51. These ratios suggest that the company is well-positioned to cover its short-term liabilities with its short-term assets.
Analysis of Working Capital Trends
As of September 30, 2024, UMH Properties reported working capital of $124.8 million, up from $100.5 million at the end of 2023. This increase reflects improved operational performance and effective management of current assets and liabilities.
Cash Flow Statements Overview
The cash flows for the nine months ended September 30, 2024, are as follows:
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Operating Activities | $54,331 | $91,114 |
| Investing Activities | ($97,014) | ($135,726) |
| Financing Activities | $52,676 | $49,306 |
Net cash provided by operating activities decreased from $91.1 million in 2023 to $54.3 million in 2024. This decline is attributed to various operational changes and market conditions. Investing activities showed a reduction in cash outflow, indicating more strategic capital expenditures. Financing activities remained robust, reflecting ongoing capital raising efforts.
Potential Liquidity Concerns or Strengths
As of September 30, 2024, UMH Properties, Inc. has cash and cash equivalents of $66.7 million, along with marketable securities of $34.2 million. Additionally, the company has $260 million available on its credit facility and approximately $147 million on its revolving lines of credit. These figures bolster the company's liquidity position, alleviating potential concerns about meeting upcoming obligations.
Overall, the liquidity metrics and cash flow trends indicate a stable financial health for UMH Properties, Inc., providing confidence to investors regarding the company's ability to sustain its operations and pursue growth opportunities.
Is UMH Properties, Inc. (UMH) Overvalued or Undervalued?
Valuation Analysis
To assess the valuation of the company, we will examine key financial metrics including the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and enterprise value-to-EBITDA (EV/EBITDA) ratios, alongside stock price trends, dividend yield, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The current P/E ratio stands at 20.5. This indicates how much investors are willing to pay for each dollar of earnings. The trailing twelve months (TTM) earnings per share (EPS) is reported at $0.87.
Price-to-Book (P/B) Ratio
The P/B ratio is currently 1.2, calculated using a book value per share of $15.00. This ratio provides insight into how the market values the company relative to its book value.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is at 10.8. The enterprise value is calculated at $1.2 billion with EBITDA reported at $111 million.
Stock Price Trends
Over the last 12 months, the stock price has fluctuated significantly. The stock opened at $18.50 a year ago and reached a high of $22.00 and a low of $15.50. As of the latest trading day, the stock price is $19.75.
Dividend Yield and Payout Ratios
The current dividend yield is 4.3%, based on an annual dividend of $0.86 per share. The payout ratio is approximately 45%, indicating that less than half of earnings are distributed as dividends.
Analyst Consensus
Analyst consensus is predominantly a "Hold," with a few "Buy" ratings. The average target price set by analysts is $20.25, indicating a potential upside of 2.5% from the current price.
| Metric | Value |
|---|---|
| P/E Ratio | 20.5 |
| P/B Ratio | 1.2 |
| EV/EBITDA Ratio | 10.8 |
| Current Stock Price | $19.75 |
| Dividend Yield | 4.3% |
| Payout Ratio | 45% |
| Analyst Consensus | Hold |
| Average Target Price | $20.25 |
Key Risks Facing UMH Properties, Inc. (UMH)
Key Risks Facing UMH Properties, Inc.
UMH Properties, Inc. faces several internal and external risks that may impact its financial health, including industry competition, regulatory changes, and market conditions.
Industry Competition
The manufactured housing sector is becoming increasingly competitive. The Company competes with both larger and regional operators for market share. As of September 30, 2024, the Company operates 139 communities, which may limit its ability to scale compared to larger competitors. The increased competition could pressure rental rates and occupancy levels, with the occupancy rate currently at 94.4%, up from 94.0% at December 31, 2023.
Regulatory Changes
Changes in laws and regulations affecting manufactured housing could impact operational costs and profitability. Limitations on rent increases in certain jurisdictions could hinder revenue growth, especially as the Company has been raising rental rates by approximately 5% to 6% annually.
Market Conditions
The Company operates in a volatile economic environment. Changes in the real estate market and general economic conditions could adversely affect demand for manufactured homes. As of September 30, 2024, the Company reported total assets of $1.5 billion and total liabilities of $643.1 million, indicating a significant debt load that could be challenging in a downturn.
Operational Risks
Operational risks include the management of newly acquired properties. Many recently acquired communities have deferred maintenance, which requires higher expenditures in the initial years of ownership. The operating expense ratio for the nine months ended September 30, 2024, was 43.3%, slightly improved from 43.3% in 2023.
Financial Risks
Financial risks are highlighted by the Company’s net debt to total market capitalization ratio, which was approximately 22% as of September 30, 2024. The Company had eighteen mortgages totaling $84.4 million due within the next 12 months, which could strain cash flows.
Strategic Risks
Strategic risks involve the Company’s ability to identify and acquire new manufactured housing communities. The current inventory of properties may not meet growth targets, affecting long-term profitability. The Company’s ability to maintain or increase rental rates is also subject to market dynamics.
Mitigation Strategies
The Company has taken steps to mitigate these risks, including expanding its credit facilities. As of September 30, 2024, the Company had $260 million available on its unsecured revolving credit facility, up from $180 million. The Company also raised $166.0 million through its Common ATM Programs during the nine months ended September 30, 2024.
| Risk Factor | Details | Current Metrics |
|---|---|---|
| Competition | Increasing competition in manufactured housing | 139 communities, occupancy at 94.4% |
| Regulatory Changes | Limitations on rent increases | Annual rental rate increase of 5%-6% |
| Market Conditions | Volatile economic environment affecting housing demand | Total assets: $1.5 billion, total liabilities: $643.1 million |
| Operational Risks | Deferred maintenance in newly acquired communities | Operating expense ratio: 43.3% |
| Financial Risks | High levels of net debt | Net debt to market cap: 22%, $84.4 million due within 12 months |
| Strategic Risks | Challenges in acquiring new properties | $260 million available credit facility |
Future Growth Prospects for UMH Properties, Inc. (UMH)
Future Growth Prospects for UMH Properties, Inc.
Key Growth Drivers
The company has identified several key growth drivers that are expected to enhance its financial performance in the coming years:
- Increased Rental Rates: The company has been raising rental rates by approximately 5% to 6% annually across most communities. This strategy significantly contributes to revenue growth.
- Occupancy Rates: Same property occupancy increased by 70 basis points, from 87.0% as of September 30, 2023, to 87.7% at September 30, 2024.
- Expansion of Rental Homes: Occupied rental homes increased by 4%, from approximately 9,300 homes at September 30, 2023, to 9,700 homes at September 30, 2024.
Future Revenue Growth Projections
Future revenue growth is projected based on the following metrics:
| Period | Rental and Related Income | Community NOI |
|---|---|---|
| Q3 2023 | $48.1 million | $27.5 million |
| Q3 2024 | $51.9 million | $29.4 million |
| 9 Months 2023 | $140.5 million | $79.7 million |
| 9 Months 2024 | $153.8 million | $88.6 million |
These figures represent an 8% increase in rental and related income for Q3 2024 compared to Q3 2023 and a 9% increase for the nine months ended September 30, 2024, compared to the same period in 2023.
Strategic Initiatives and Partnerships
The company is also focusing on strategic initiatives that may drive future growth:
- Joint Ventures: The joint venture with Nuveen Real Estate is expected to facilitate acquisitions of manufactured home communities that are under development or newly developed.
- Opportunity Zone Fund: The company aims to acquire communities in qualified opportunity zones that require substantial capital investment.
Competitive Advantages
Several competitive advantages position the company favorably for growth:
- Low Debt Levels: As of September 30, 2024, the company’s net debt to total market capitalization was approximately 22%, indicating a strong balance sheet.
- Liquidity Position: The company had cash and cash equivalents of $66.7 million, marketable securities of $34.2 million, and $260 million available on its credit facility as of September 30, 2024.
Sales of Manufactured Homes
Sales of manufactured homes have shown promising growth:
| Period | Sales Amount | Number of Homes Sold |
|---|---|---|
| Q3 2023 | $7.9 million | 90 homes |
| Q3 2024 | $8.7 million | 100 homes |
| 9 Months 2023 | $23.4 million | 264 homes |
| 9 Months 2024 | $24.9 million | 300 homes |
This reflects a 10% increase in sales for Q3 2024 compared to Q3 2023 and a 6% increase for the nine months ended September 30, 2024.
Market Trends
The macroeconomic environment continues to favor the rental market:
- High mortgage rates and declining inventory have made renting more attractive compared to buying.
- The National Association of Realtors indicates that existing home sales are on track for their worst year since 1995.
UMH Properties, Inc. (UMH) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- UMH Properties, Inc. (UMH) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of UMH Properties, Inc. (UMH)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View UMH Properties, Inc. (UMH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.