Here's How UMH Properties Can Afford Its 5% Dividend Yield
UMH Properties (NYSE: UMH) is among a small number of manufactured home real estate investment trusts (REITs) that investors can buy. Its 5% dividend yield is at the high end of the group. There are some good reasons for that, one of which is that it paid out more in dividends than it generated in adjusted funds from operations (FFO) in the first quarter. If management's plans play out as expected, that situation will correct itself as the year progresses.
The major players in the manufactured home sector, basically industry giants Sun Communities (NYSE: SUI) and Equity Lifestyle Properties (NYSE: ELS), tend to focus their portfolios around geographic regions with large retirement interest (think Florida). UMH, with a market cap of a touch under $1 billion, is notably smaller than both Sun and Equity Lifestyle, which have market caps of $17 billion and $13 billion, respectively. Its portfolio is located predominantly in the Northeast. It is similar, but different.
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Source Fool.com
