I was generating some interest in MAA - pretty good valuations compared to the rest of the apartment REITs - until I downloaded the 2004 annual report and saw that there has been no dividend increases for a while [two years?]. The other apartment REITs I own [HME and UDR] at least have had anemic increases yearly. So what is the MAA story on divs? Or they hoarding cash flow to internally generate growth? Or are they not so share-holder friendly? I can not tell.
I listened to the a replay of the last CC yesterday. Management was upbeat - had a good story to tell. They also commented on MAA's relative valuation. So I went back to the annual report to see MAA's geographic diversification. I did not find any info in the 2004 report. This Texan is wanting to avoid a REIT with a high concentration of Texas multi-family assets - and MAA has apartments in Dallas and Houston. I would also want to be careful about any Atlanta concentration. So the geo data would help me.
They are extremely shareholder friendly. (I've been familar with the stock and management for at least a few years now). Since the current CEO took over from the founder a couple of years ago the focus was on bridging the gap between what was being paid out as dividend and what has being earned. They've done that now. The former CEO paid out about 15 cents more a year than they had in FFO, figuring they would sell a property or two a year in the normal course of business and the cap. gains from that would cover the difference. Trouble was Wall Street didn't like that and the stock lagged the group for years. Since the current CEO is doing things in a more conventional, Wall Street-friendly way, the stock has caught up with its peers. That was the sweet spot in terms of when to own the stock, in my opinion. Now, it is fully priced.
They do have exposure to both Texas and Atlanta, but not so much that that should be of major concern.
Basically, the story here is honest, straightforward, shareholder-oriented management, decent, well-managed, modern portfolio, but the stock is fully valued and is vulnerable if interest rates rise much.
Zebraspit has it pretty well covered. My only critcism is that the current CEO has a pretty small stake in the company. He could just be waiting for the right moment to buy I suppose. But management without real skin in the game just doesn't perform as well.
I've been here since the days when wallstreet didn't like MAA so much (nearly 4 years), waiting for the day when dividends start increasing. Hopefully it will be soon.