UMH
UMH Properties, Inc.
$16.66
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 27.2% below fair value
You pay
$16.66
Bear
$19.31
Fair
$22.88
Bull
$26.45
Bear
$19.31
+15.9%
$1.09 FFO × 19x
Fair
$22.88
+37.3%
$1.09 FFO × 23x
Bull
$26.45
+58.8%
$1.09 FFO × 27x
Adjust Assumptions
23.2x
$
Key Value Driver
FFO/share ($1.09) × residential P/FFO multiple
Implied Market Multiple
15.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (15 analysts)
$17.75
Divergence from AlphaVal
29%
Summary
At $1.09 FFO/share with a 23x residential REIT multiple, the base-case value is $22.88 per share. Dividend yield: 5.4%. DDM cross-check: $17.24.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend yield of 5.4% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $17.75 (from 15 analysts). Our estimate is 29% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify