Success and Growth for UMH Properties in 2023
In 2023, UMH Properties, a real estate investment trust, reported a successful fourth quarter and year-end, with remarkable growth in same-property income and net operating income. The company specializes in manufactured home communities and has seen a net increase in occupancy, positioning itself for continued expansion in 2024.
Key Achievements for UMH Properties in 2023
UMH Properties achieved a 9% growth in same-property income and a 13% increase in same-property NOI for 2023. The company rented or sold 1,300 new homes and achieved a net increase of 704 units in occupancy. Normalized Funds From Operations (FFO) per share rose by 15% in the fourth quarter, totaling $0.86 for the year.
- UMH plans to add 800 to 900 homes in 2024 and projects rental and sales revenue to increase by $20 million compared to 2023.
- The company maintained high occupancy and rent collection rates throughout the COVID-19 pandemic.
- UMH’s partnership with Nuveen Real Estate aims to develop over 3,400 vacant sites and 2,100 acres of land.
- The company boasts a strong capital structure, with $690 million in debt and $57.3 million in cash and cash equivalents.
Company Outlook for 2024
UMH anticipates a 5% growth in rental revenue, resulting in $9.5 million in new revenue for 2024. The installation and rental of 800 homes are expected to generate an additional $10 million in revenue. For every 100 new homes sold, the company expects $10 million in gross revenue and $2 million in net income.
The company aims to continue adding 1,000 rental homes per year, targeting a 90% occupancy rate for significant revenue growth.
Bullish Highlights and Misses
UMH has achieved double-digit same-property NOI increases for eight consecutive quarters. The company expects high single-digit returns going forward and the potential for dividend increases. UMH projects strong demand for sales and rentals across all 11 states it operates in. There were no specific misses reported from the earnings call.
Q&A Highlights
CEO Samuel Landy discussed the impact of interest rates on home sales financing and the trade-off between renting and selling homes. UMH’s cost of capital, sources of capital, and conservative financial position were highlighted, with confidence expressed in future FFO growth. Landy emphasized focusing on individual community occupancy growth and the company’s expense ratio reduction from 42% to 40%.
UMH Properties concluded its earnings call with a positive outlook for 2024, emphasizing its strategic partnership with Nuveen Real Estate, the potential for revenue growth, and its commitment to addressing the affordable housing shortage. The company’s next earnings call is scheduled for May 2024, where they will report first-quarter results and continue to engage with investors and analysts.
InvestingPro Insights
UMH Properties has demonstrated resilience and strategic growth, as reflected in its latest financial data and analyst insights. According to real-time data from InvestingPro, UMH Properties has a market capitalization of $1050 million USD, signaling a robust presence in the real estate investment trust market. The company boasts a notable revenue growth of 13.23% over the last twelve months as of Q4 2023, showcasing its ability to expand its income streams effectively.
InvestingPro Tips suggest that UMH Properties has a longstanding commitment to its shareholders, maintaining dividend payments for 35 consecutive years and raising its dividend for the past three years. This consistency is a positive sign for investors looking for stable income, especially in a market that values long-term financial health and shareholder return. Additionally, the company’s liquid assets exceed its short-term obligations, indicating a strong financial position to meet its current liabilities.
UMH Properties is set to continue its growth trajectory in 2024, with a focus on expanding its rental and sales revenue, addressing the affordable housing shortage, and partnering with key players in the real estate market to drive further success.
