UMH Properties (NYSE: UMH) and Equity Residential (NYSE:EQR) are both residential reits companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, profitability, risk and dividends.

Volatility & Risk

UMH Properties has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, Equity Residential has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500.

Dividends

UMH Properties pays an annual dividend of $0.72 per share and has a dividend yield of 4.7%. Equity Residential pays an annual dividend of $2.02 per share and has a dividend yield of 2.9%. UMH Properties pays out -327.3% of its earnings in the form of a dividend. Equity Residential pays out 99.0% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings for UMH Properties and Equity Residential, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UMH Properties 0 0 6 0 3.00
Equity Residential 1 9 4 0 2.21

UMH Properties currently has a consensus target price of $18.88, indicating a potential upside of 24.18%. Equity Residential has a consensus target price of $69.15, indicating a potential downside of 0.10%. Given UMH Properties’ stronger consensus rating and higher possible upside, equities analysts plainly believe UMH Properties is more favorable than Equity Residential.

Profitability

This table compares UMH Properties and Equity Residential’s 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 Residential 30.88% 7.22% 3.66%

Institutional & Insider Ownership

52.9% of UMH Properties shares are owned by institutional investors. Comparatively, 92.1% of Equity Residential shares are owned by institutional investors. 11.6% of UMH Properties shares are owned by insiders. Comparatively, 3.8% of Equity Residential shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares UMH Properties and Equity Residential’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
UMH Properties $99.21 million 5.35 $11.53 million ($0.22) -69.09
Equity Residential $2.43 billion 10.49 $4.29 billion $2.04 33.93

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

Summary

Equity Residential beats UMH Properties on 9 of the 16 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 Residential Company Profile

Equity Residential is a real estate investment trust. The Company’s primary business is the acquisition, development and management of multifamily residential properties. Its segments include Boston, New York, Washington D.C., Southern California, San Francisco, Seattle and Other Markets. Southern California includes Los Angeles, San Diego and Orange County. Other Markets includes Phoenix. It is engaged in leasing of apartment units to residents. It focuses on rental apartment properties in urban and high-density suburban coastal gateway markets. As of December 31, 2016, the Company owned 302 properties located in 10 states and the District of Columbia consisting of 77,458 apartment units. The Company’s projects include The Alton, 455 Eye Street, 855 Brannan, Cascade, One Henry Adams, 340 Fremont and Vista 99. ERP Operating Limited Partnership (ERPOP) conducts the multifamily residential property business of Equity Residential.

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