Critical Comparison: Elme Communities (NYSE:ELME) versus United Development Funding IV (OTCMKTS:UDFI)

Elme Communities (NYSE:ELME) and United Development Funding IV (OTCMKTS:UDFI) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Elme Communities and United Development Funding IV, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Elme Communities	0	1	1	0	2.50
United Development Funding IV	0	0	0	0	N/A

Elme Communities currently has a consensus price target of $16.67, suggesting a potential upside of 9.51%. Given Elme Communities’ higher possible upside, equities research analysts plainly believe Elme Communities is more favorable than United Development Funding IV.

Earnings and Valuation

This table compares Elme Communities and United Development Funding IV’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Elme Communities	$227.91 million	5.88	-$52.98 million	($0.61)	-24.95
United Development Funding IV	N/A	N/A	N/A	N/A	N/A

United Development Funding IV has lower revenue, but higher earnings than Elme Communities.

Institutional & Insider Ownership

87.9% of Elme Communities shares are held by institutional investors. 1.2% of Elme Communities shares are held by company insiders. Comparatively, 0.5% of United Development Funding IV shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Elme Communities and United Development Funding IV’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Elme Communities	-22.88%	-4.51%	-2.82%
United Development Funding IV	N/A	N/A	N/A

Summary

Elme Communities beats United Development Funding IV on 5 of the 8 factors compared between the two stocks.

About Elme Communities

Elme Communities is committed to elevating what home can be for middle-income renters by providing a higher level of quality, service, and experience. The Company is a multifamily real estate investment trust that owns and operates approximately 9,400 apartment homes in the Washington, DC metro and the Atlanta metro regions, and owns approximately 300,000 square feet of commercial space. Focused on providing quality, affordable homes to a deep, solid, and underserved base of mid-market demand, Elme Communities is building long-term value for shareholders.

About United Development Funding IV

United Development Funding IV invests in secured loans for the acquisition and development of land into single-family home lots, and the construction of model and new single-family homes. It also makes equity investments in residential real estate. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. United Development Funding IV was founded in 2008 and is headquartered in Grapevine, Texas.