URI vs. SSD: Which Stock Should Value Investors Buy Now?
Ushering in good news for its shareholders, UDR Inc. UDR declared a 4% increase in annualized common dividend for 2018. The company will now pay a cash dividend of 32.25 cents per share for the first quarter compared with 31 cents paid in the prior quarter.
The new dividend will be paid on Apr 30 to shareholders on record as of Apr 9. Based on this increased rate, annualized yield comes to about 3.7%, considering UDR's closing price of $34.70 on Mar 27.
Solid dividend payouts are arguably the biggest attraction for REIT investors and UDR is consistent in this regard. In fact, the new dividend will mark this residential real estate investment trust’s (REIT) 182nd successive quarterly dividend payout on its common stock. Prior to the latest hike, the company had increased its dividend per share by 5% in 2017.
Further, UDR is believed to have adequate capital to support its dividend policy. The company reported fourth-quarter 2017 funds from operations (FFO) as adjusted per share of 48 cents, matching the Zacks Consensus Estimate. The figure also came higher than the prior-year quarter tally of 46 cents.
Total revenues for the quarter rose 4.1% year over year to $252.9 million. Further, the top line surpassed the Zacks Consensus Estimate of $251.4 million. Growth in total revenues was due to the higher revenues from same-store communities and stabilized non-mature communities. Moreover, as of Dec 31, 2017, the company had around $855.3 million available from a combination of cash and undrawn capacity on its credit facilities.
UDR’s portfolio, located in the targeted U.S. markets, has a superior product-mix. However, the company continues to deal with an elevated level of apartment supply in a number of its markets. This is likely to limit the landlord’s ability to demand higher rents and increase concessional activities.
UDR carries a Zacks Rank #3 (Hold). In the past month, the stock has gained 3%, outperforming the industry’s rally of 2.4%.
Stocks Worth a Look
A few better-ranked stocks from the same industry are Arbor Realty Trust ABR, Extra Space Storage Inc. EXR and Sotherly Hotels Inc. SOHO, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arbor Realty Trust’s Zacks Consensus Estimate for 2018 FFO per share has been revised 2.3% upward to 90 cents over the past month. Its share price has risen 6.6% in six months’ time.
Extra Space Storage’s FFO per share estimates for the current year inched up 1.6% to $4.57 in a month’s time. Its shares have gained 7.0% over the past six months.
Sotherly Hotels’ FFO per share estimates for 2018 have been revised approximately 1.9% upward to $1.05 over the past month. The stock has climbed 13.2% during the past six months.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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