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Mid-America Apartment Communities Inc. Message Board

  • andynsheri andynsheri Jan 11, 2011 2:58 PM Flag

    MAA a property management comparison

    Mid-America Apartment Communities, Inc. (MAA) - a comparative analysis

    Included in this topic is a free access link https://spreadsheets.google.com/ccc?key=0AthzzdOjq8T7dFNEc0MyaG5NS0RxZVozdlh0a2hJYkE&hl=en&authkey=CLWHpasK to a comparative analysis of MAA with four other property management real estate investment trusts (reits). The analysis period covers the last nine quarters of vital balance sheet and income statement items. It also entails calculated ratios regarding performance, share valuation, funds from operation, and risk and sales ratios.

    Upward trends in MAA share price were spotted with appreciation of over 73% from March 31, 2009 of $33.76 to Sept 30, 2010, for a price of $58.64. Since Sept 30 MAA has gained $2.82 in share price appreciation.

    Peculiar to MAA;
    MAA owns 155 mid level multifamily communities and would appeared to be poised to take full advantage of the national trend in increasing multi-family occupancy rentals. While revenues have increased from Mar 09 to Sep 30 2010 by $7.67 million rental expense has increased by $9.75 million lowering the earnings per share for MAA over this time frame. MAA redeemed all of it’s preferred shares in the 2nd and 3 rd quarter of 2010 and this should add approximately .11 per share to earnings per share in the 4th quarter.

    More reasons to be concerned about going long!
    1)Hi price to earnings, of 140
    2)MAA paying out dividends in excess of earnings
    3)Possible dividend reduction because they pay out in excess of earnings
    4)Because of the large run up in stock price dividend yield has shrunk from 7.29% March of 2009 to 4.2% Sep 30, 2010
    5)The risk of losing new investment capital due to a market correction would be greater than any expected return from a diminished dividend yield.
    6)Institutional and Mutual fund managers are most likely not going to be going after MAA for growth in income or capital appreciation. It’s a hard buy.
    7)Price per share to Book value is coming in at 4.23 that’s $4.23 of market value per share paid for each dollar of AVB book value.
    8)Price per share to revenue per share is coming in at a high OF 20.62 that is current buyers of MAA shares are paying $20.62 share price for every dollar in earned gross revenue.
    9)The capital funding practices by MAA are with high with a debt to capital ratio of 4.5 and 5 million of new shares were issued from Mar 2009 to Sept 30, 2010.

    10)The positive plays on MAA? The sale of multi-family apartments for gain are the only bright aspect to paying such a high price for MAA shares. These large transactions are few and sometimes far between with substantial declines in net income for the lean times. Morgan Keegan recently upgraded MAA from market perform to outperform. MAA would have to do better at cutting expenses and broker some sales to achieve this.

    Good luck to all!

 
MAA
68.15-0.30(-0.44%)Apr 17 4:06 PMEDT

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