Critical Contrast: UMH Properties (NYSE:UMH) & BRT Apartments (BRT)

BRT Apartments (NYSE: BRT) and UMH Properties (NYSE:UMH) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Volatility and Risk

BRT Apartments has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500. Comparatively, UMH Properties has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500.

Institutional & Insider Ownership

22.1% of BRT Apartments shares are held by institutional investors. Comparatively, 54.9% of UMH Properties shares are held by institutional investors. 41.9% of BRT Apartments shares are held by company insiders. Comparatively, 11.6% of UMH Properties shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for BRT Apartments and UMH Properties, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BRT Apartments 0 1 2 0 2.67
UMH Properties 0 0 6 0 3.00

BRT Apartments currently has a consensus target price of $11.92, indicating a potential downside of 8.82%. UMH Properties has a consensus target price of $18.60, indicating a potential upside of 33.05%. Given UMH Properties’ stronger consensus rating and higher probable upside, analysts clearly believe UMH Properties is more favorable than BRT Apartments.

Profitability

This table compares BRT Apartments and UMH Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BRT Apartments 12.86% 6.00% 1.47%
UMH Properties 1.05% 0.74% 0.16%

Dividends

BRT Apartments pays an annual dividend of $0.72 per share and has a dividend yield of 5.5%. UMH Properties pays an annual dividend of $0.72 per share and has a dividend yield of 5.2%. BRT Apartments pays out 73.5% of its earnings in the form of a dividend. UMH Properties pays out -327.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Valuation and Earnings

This table compares BRT Apartments and UMH Properties’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BRT Apartments $105.77 million 1.73 $13.60 million $0.98 13.34
UMH Properties $99.21 million 4.92 $11.53 million ($0.22) -63.54

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

Summary

BRT Apartments beats UMH Properties on 9 of the 16 factors compared between the two stocks.

BRT Apartments Company Profile

BRT Apartments Corp. is a real estate investment trust (REIT). The Trust is focused on the ownership, operation and development of multi-family properties. These activities are primarily conducted through joint ventures in which the Trust has an equity interest in the entity owning the property. The Trust’s segments include Multi-Family Real Estate and Other Assets. The Multi-Family Real Estate segment includes the ownership, operation and development of multi-family properties. The Other Assets segment includes the ownership and operation of the Trust’s other real estate assets and a real estate loan. As of December 31, 2016, the Trust owned 30 multi-family properties with 8,624 units located in 11 states (including 271 units at a property in the lease up stage), and interests in two unconsolidated joint ventures. The Trust also owns and operates various other real estate assets.

UMH Properties Company Profile

UMH Properties, Inc. (UMH) is a real estate investment trust (REIT). The Company’s primary business is the ownership and operation of manufactured home communities, including leasing manufactured home sites to private manufactured home owners. The Company also leases homes to residents, and through its taxable REIT subsidiary, UMH Sales and Finance, Inc. (S&F), conducts manufactured home sales in its communities. As of December 22, 2017, the Company owned 112 manufactured home communities consisting of approximately 20,000 developed homesites. The communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana and Michigan. In connection with the operation of its communities, UMH also leases homes to prospective tenants. As of December 31, 2016, UMH owned a total of 4,700 rental homes, representing approximately 26% of its developed sites. These rental homes are owned by the Company and rented to residents.

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