UDR Inc. UDR is well poised for growth with a geographically diverse portfolio and a superior product-mix of A/B quality properties in the urban and sub-urban markets. UDR’s portfolio comprises properties throughout the United States, including both coastal and Sunbelt locations. This strategy of maintaining a diversified portfolio across various geographies and price points limits volatility and concentration risks while aiding the company to generate steady rental revenues.
Also, technological moves and process enhancements will help UDR ride the growth curve. Its Next Generation Operating Platform allows electronic interactions with and provision of services to the residents and prospects throughout its diversified portfolio. This is likely to offer UDR a competitive edge over others.
UDR continues to focus on its strategic priorities, such as disciplined capital allocation, maintenance of an investment-grade balance sheet and cash flow enhancement to support operational efficiency and dividend growth. This places it well to sail through the uncertain times. Further, investment-grade credit ratings enable UDR to procure debt financing at attractive costs and lower weighted average interest rate on debt.
Shares of this presently Zacks Rank #2 (Buy) player have outperformed the industry in the past three months. Its shares have appreciated 6.8% compared with the industry’s growth of 3.7%. In addition, the estimate revision trend for fourth-quarter 2021 funds from operations (FFO) per share indicates a favorable outlook for UDR, with the Zacks Consensus Estimate moving 1.9% north.
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Nonetheless, an exposure to the challenged urban residential assets, where the flexible working environment is still denting demand, might continue to affect the rental rates and occupancy levels.
Further, the regulations that limit its ability to quickly evict tenants might affect cash flows. Also, rising homeownership rates for the young age cohorts is likely to hurt renter-housing demand.
Other Stocks to Consider
Some other top-ranked stocks from the REIT sector are Camden Property Trust CPT, Centerspace CSR and MidAmerica Apartment Communities MAA.
Camden Property carries a Zacks Rank of 2 at present. Shares of CPT have gained 12.2% in the past six months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Camden Property’s 2021 FFO per share has been raised marginally over the past month. Over the last four quarters, CPT’s FFO per share surpassed the consensus mark on three occasions, missing the mark on the remaining one, the average negative surprise being 0.02%.
Centerspace has a Zacks Rank of 2 at present. Shares of CSR have gained 11.5% in the past six months.
The Zacks Consensus Estimate for Centerspace’s 2021 FFO per share has been raised 1.5% over the past two months. Over the last four quarters, CSR’s FFO per share surpassed the consensus mark on all occasions, the average beat being 6.7%.
The Zacks Consensus Estimate for MidAmerica Apartment’s 2021 FFO per share has been raised 1.3% in the past two months. Over the last four quarters, MAA’s FFO per share surpassed the consensus mark on all occasions, the average being 2.4%.
Currently, MAA carries a Zacks Rank of 2. Shares of MidAmerica Apartment have appreciated 14.8% in the past six months.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.
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United Dominion Realty Trust, Inc. (UDR): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.