Here's Why You Should Hold UDR Stock In Your Portfolio Now
Zacks Investment Research | Dec 18, 2017 08:56PM ET
UDR, Inc. (NYSE:UDR) has been continuously enhancing the overall quality of its portfolio by acquiring, developing and redeveloping properties in core operating markets and divesting non-core assets. While the company’s extensive portfolio-repositioning activities will aid its prospects, increase in supply of residential units will likely result in lesser absorption.
Nonetheless, in the third quarter, the company posted in-line results with respect to adjusted funds from operations (FFO). Moreover, year-over-year improvement in revenues wasprimarily due to revenue growth from same-store communities, and stabilized, non-mature communities.
Notably, UDR has one of the most favorably positioned multi-family apartment portfolio in the United States. The company’s superior product mix and strategic sub-market locations helped achieve growth in combined new and renewal lease. With improving apartment market fundamentals, we anticipate further enhancement in UDR’s leasing business.
Moreover, a well-positioned portfolio should help the company meet the rise in demand for apartment properties from “echo boomers” — children of the baby-boomer generation.This particular population’s propensity to rent is high. We anticipate that growth in this age group through 2025 and positive job environment in the years ahead will drive demand for UDR’s properties.
Further, the company remains focused to enhance cash flows and achieve a strong balance sheet. These efforts have supported UDR’s dividend growth and operational efficiency. In fact, in first-quarter 2017, the company hiked its dividend payoutby 5% and retained the same payout in the subsequent quarters. Such investor-friendly moves also boost shareholders’ confidence in the stock.
Shares of UDR have outperformed the Zacks Investment Research
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