Head to Head Survey: Post Properties (PPS) and UDR (UDR)

UDR (NYSE: UDR) and Post Properties (NYSE:PPS) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.

Institutional & Insider Ownership

96.7% of UDR shares are held by institutional investors. Comparatively, 94.3% of Post Properties shares are held by institutional investors. 3.1% of UDR shares are held by company insiders. Comparatively, 2.2% of Post Properties shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares UDR and Post Properties’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
UDR $995.79 million 9.09 $121.55 million $0.43 78.58
Post Properties N/A N/A N/A $1.43 45.47

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

Dividends

UDR pays an annual dividend of $1.24 per share and has a dividend yield of 3.7%. Post Properties pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. UDR pays out 288.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Post Properties pays out 131.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. UDR has raised its dividend for 8 consecutive years and Post Properties has raised its dividend for 7 consecutive years. UDR is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent recommendations for UDR and Post Properties, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UDR 0 10 3 0 2.23
Post Properties 0 0 0 0 N/A

UDR currently has a consensus target price of $38.82, indicating a potential upside of 14.88%. Given UDR’s higher probable upside, analysts plainly believe UDR is more favorable than Post Properties.

Profitability

This table compares UDR and Post Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
UDR 12.21% 4.53% 1.67%
Post Properties 17.36% 5.79% 3.07%

Risk and Volatility

UDR has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500. Comparatively, Post Properties has a beta of 0.14, suggesting that its share price is 86% less volatile than the S&P 500.

Summary

UDR beats Post Properties on 9 of the 14 factors compared between the two stocks.

About UDR

UDR, Inc. is a self-administered real estate investment trust. The Company owns, operates, acquires, renovates, develops, redevelops, disposes of and manages multifamily apartment communities generally located in various markets across the United States. The Company’s segments are Same-Store Communities and Non-Mature Communities/Other. As of December 31, 2016, the Company’s consolidated real estate portfolio included 127 communities located in 18 markets, with a total of 39,454 completed apartment homes. As of December 31, 2016, the Company also had an ownership interest in 27 communities containing 6,849 apartment homes through unconsolidated joint ventures or partnerships. As of December 31, 2016, the Company’s properties were in various locations, such as Orange County, San Francisco and Los Angeles in California; Seattle, Washington; Richmond, Virginia; Baltimore, Maryland; Orlando and Tampa in Florida; Nashville, Tennessee, and Dallas and Austin in Texas.

About Post Properties

Post Properties, Inc. is a self-administrated and self-managed equity real estate investment trust (REIT). The Company’s segments include Fully stabilized (same store) communities, which includes apartment communities that have been stabilized for both the current and prior year; Newly stabilized communities, which includes communities that reached stabilized occupancy in the prior year; Lease-up communities, which includes communities that are under development, rehabilitation and in lease-up but were not stabilized by the beginning of the current year, including communities that stabilized during the current year; Acquired communities, which include communities acquired in the current or prior year, and Held for sale and sold communities, which include apartment and mixed-use communities classified as held for sale or sold. Its operating divisions include Post Apartment Management, Post Construction and Property Services, Post Investment Group and Post Corporate Services.

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