UMH
UMH Properties, Inc.
$15.17
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 33.0% below fair value
You pay
$15.17
Bear
$19.10
Fair
$22.63
Bull
$26.17
Bear
$19.10
+25.9%
$1.09 FFO × 19x
Fair
$22.63
+49.2%
$1.09 FFO × 23x
Bull
$26.17
+72.5%
$1.09 FFO × 27x
Adjust Assumptions
23.2x
$
Key Value Driver
FFO/share ($1.09) × residential P/FFO multiple
Implied Market Multiple
13.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (15 analysts)
$17.75
Divergence from AlphaVal
27%
Summary
At $1.09 FFO/share with a 23x residential REIT multiple, the base-case value is $22.63 per share. Dividend yield: 5.9%. DDM cross-check: $16.41.
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 5.9% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $16.41 (28% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $17.75 (from 15 analysts). Our estimate is 27% 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