Contrasting Equity Lifestyle Properties (NYSE:ELS) and UMH Properties (UMH)

UMH Properties (NYSE: UMH) and Equity Lifestyle Properties (NYSE:ELS) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, earnings, analyst recommendations, valuation and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations for UMH Properties and Equity Lifestyle Properties, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UMH Properties 0 0 6 0 3.00
Equity Lifestyle Properties 0 5 0 0 2.00

UMH Properties currently has a consensus price target of $18.60, suggesting a potential upside of 21.17%. Equity Lifestyle Properties has a consensus price target of $86.40, suggesting a potential downside of 4.21%. Given UMH Properties’ stronger consensus rating and higher possible upside, equities research analysts clearly believe UMH Properties is more favorable than Equity Lifestyle Properties.

Volatility and Risk

UMH Properties has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500. Comparatively, Equity Lifestyle Properties has a beta of 0.3, meaning that its stock price is 70% less volatile than the S&P 500.

Profitability

This table compares UMH Properties and Equity Lifestyle Properties’ 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%
Equity Lifestyle Properties 22.52% 21.07% 5.87%

Dividends

UMH Properties pays an annual dividend of $0.72 per share and has a dividend yield of 4.7%. Equity Lifestyle Properties pays an annual dividend of $1.95 per share and has a dividend yield of 2.2%. UMH Properties pays out -327.3% of its earnings in the form of a dividend. Equity Lifestyle Properties pays out 93.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. UMH Properties has raised its dividend for 6 consecutive years. UMH Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares UMH Properties and Equity Lifestyle Properties’ 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 5.40 $11.53 million ($0.22) -69.77
Equity Lifestyle Properties $870.43 million 9.10 $173.26 million $2.09 43.16

Equity Lifestyle Properties has higher revenue and earnings than UMH Properties. UMH Properties is trading at a lower price-to-earnings ratio than Equity Lifestyle Properties, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

54.9% of UMH Properties shares are owned by institutional investors. Comparatively, 97.9% of Equity Lifestyle Properties shares are owned by institutional investors. 11.6% of UMH Properties shares are owned by insiders. Comparatively, 6.1% of Equity Lifestyle Properties shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Equity Lifestyle Properties beats UMH Properties on 9 of the 17 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.

Equity Lifestyle Properties Company Profile

Equity LifeStyle Properties, Inc. is a real estate investment trust (REIT). The Company is an owner and operator of lifestyle-oriented properties (properties) consisting primarily of manufactured home (MH) communities and recreational vehicle (RV) resorts and campgrounds. The Company operates through two segments: Property Operations and Home Sales and Rentals Operations. The Property Operations segment owns and operates land lease properties and the Home Sales and Rentals Operations segment purchases, sells and leases homes at the properties. It leases individual developed areas (sites) with access to utilities for placement of factory built homes, cottages, cabins or RVs. As of December 31, 2016, the Company’s property portfolio included 391 properties consisted of 146,610 residential sites. Its properties are designed for home options of various sizes and designs that are produced off-site by third-party manufacturers, installed and set on designated sites within the properties.

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