UMH Properties (NYSE:UMH) vs. Sun Communities (NYSE:SUI) Critical Analysis

Sun Communities (NYSE:SUI) and UMH Properties (NYSE:UMH) are both real estate companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of recent ratings and target prices for Sun Communities and UMH Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sun Communities	1	5	9	2	2.71
UMH Properties	0	2	2	1	2.80

Sun Communities presently has a consensus price target of $136.25, indicating a potential upside of 13.30%. UMH Properties has a consensus price target of $17.25, indicating a potential upside of 16.87%. Given UMH Properties’ stronger consensus rating and higher possible upside, analysts clearly believe UMH Properties is more favorable than Sun Communities.

Insider and Institutional Ownership

99.6% of Sun Communities shares are owned by institutional investors. Comparatively, 75.4% of UMH Properties shares are owned by institutional investors. 1.6% of Sun Communities shares are owned by company insiders. Comparatively, 8.3% of UMH Properties shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Sun Communities has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, UMH Properties has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500.

Valuation & Earnings

This table compares Sun Communities and UMH Properties”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sun Communities	$2.31 billion	6.22	$1.37 billion	($6.16)	-19.52
UMH Properties	$261.75 million	4.83	$26.50 million	$0.05	295.20

Sun Communities has higher revenue and earnings than UMH Properties. Sun Communities is trading at a lower price-to-earnings ratio than UMH Properties, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sun Communities and UMH Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sun Communities	-36.00%	5.02%	2.82%
UMH Properties	9.04%	4.47%	1.47%

Dividends

Sun Communities pays an annual dividend of $4.48 per share and has a dividend yield of 3.7%. UMH Properties pays an annual dividend of $0.90 per share and has a dividend yield of 6.1%. Sun Communities pays out -72.7% of its earnings in the form of a dividend. UMH Properties pays out 1,800.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sun Communities has raised its dividend for 8 consecutive years and UMH Properties has raised its dividend for 4 consecutive years.

Summary

Sun Communities beats UMH Properties on 10 of the 18 factors compared between the two stocks.

About Sun Communities

Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of December 31, 2023, the Company owned, operated, or had an interest in a portfolio of 667 developed MH, RV and Marina properties comprising 179,310 developed sites and approximately 48,030 wet slips and dry storage spaces in the U.S., the UK and Canada.

About UMH Properties

UMH Properties, Inc., which was organized in 1968, is a public equity REIT that owns and operates 135 manufactured home communities containing approximately 25,800 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan, Maryland, Alabama, South Carolina and Georgia. UMH also has an ownership interest in and operates two communities in Florida, containing 363 sites, through its joint venture with Nuveen Real Estate