United Dominion Realty Trust (UDR) & Sun Communities (SUI) Head to Head Analysis

United Dominion Realty Trust (NYSE: UDR) and Sun Communities (NYSE:SUI) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, institutional ownership, risk and profitability.

Dividends

United Dominion Realty Trust pays an annual dividend of $1.24 per share and has a dividend yield of 3.2%. Sun Communities pays an annual dividend of $2.68 per share and has a dividend yield of 3.0%. United Dominion Realty Trust pays out 112.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sun Communities pays out 382.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. United Dominion Realty Trust has increased its dividend for 7 consecutive years. United Dominion Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares United Dominion Realty Trust and Sun Communities’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
United Dominion Realty Trust $979.22 million 10.64 $616.47 million $1.10 35.39
Sun Communities $936.86 million 7.48 $443.91 million $0.70 126.74

United Dominion Realty Trust has higher revenue and earnings than Sun Communities. United Dominion Realty Trust is trading at a lower price-to-earnings ratio than Sun Communities, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

United Dominion Realty Trust has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500. Comparatively, Sun Communities has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500.

Profitability

This table compares United Dominion Realty Trust and Sun Communities’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Dominion Realty Trust 30.74% 10.40% 3.97%
Sun Communities 6.82% 2.59% 1.07%

Insider and Institutional Ownership

97.6% of United Dominion Realty Trust shares are held by institutional investors. Comparatively, 94.3% of Sun Communities shares are held by institutional investors. 3.1% of United Dominion Realty Trust shares are held by company insiders. Comparatively, 4.2% of Sun Communities shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for United Dominion Realty Trust and Sun Communities, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Dominion Realty Trust 2 9 4 0 2.13
Sun Communities 0 2 4 0 2.67

United Dominion Realty Trust currently has a consensus price target of $39.10, suggesting a potential upside of 0.44%. Sun Communities has a consensus price target of $91.33, suggesting a potential upside of 2.95%. Given Sun Communities’ stronger consensus rating and higher possible upside, analysts clearly believe Sun Communities is more favorable than United Dominion Realty Trust.

Summary

United Dominion Realty Trust beats Sun Communities on 12 of the 16 factors compared between the two stocks.

About United Dominion Realty Trust

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 Sun Communities

Sun Communities, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is a fully integrated real estate company, which, together with its affiliates and predecessors, has been in the business of acquiring, operating, developing, and expanding manufactured housing (MH) and recreational vehicle (RV). As of December 31, 2016, it owned and operated or had an interest in a portfolio of properties located throughout the United States and Ontario, Canada, including 226 MH communities, 87 RV communities, and 28 properties containing both MH and RV sites. The Company operates through two segments: Real Property Operations and Home Sales and Rentals. The Real Property Operations segment owns, operates, or has an interest in a portfolio, and develops MH communities and RV communities throughout the United States and is in the business of acquiring, operating, and expanding MH and RV communities.

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