We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Mid-America Apartment (MAA) an Apt Portfolio Pick Right Now?
Read MoreHide Full Article
Headquartered in Germantown, TN, Mid-America Apartment Communities (MAA - Free Report) — commonly known as MAA — is engaged in owning, managing, acquiring, developing and redeveloping quality apartment communities, mainly in the Southeast, Southwest and Mid-Atlantic regions of the United States.
Shares of this residential REIT have risen 1.1% so far in the quarter against the industry’s decline of 5.1%.
Image Source: Zacks Investment Research
MAA is experiencing a favorable estimate revision trend. Estimates for the fourth quarter and current-year funds from operations (FFO) per share have moved north over the past month to $2.28 and 8.46, respectively. Projected FFO per share growth rates for the fourth quarter and 2022 are 20.0% and 20.7%, respectively.
MAA’s diversified Sunbelt portfolio was less severely affected by the pandemic and the economic shutdown. Rather, the pandemic has accelerated employment shifts and a population inflow into the company’s markets as renters seek more business-friendly, lower-taxed and low-density cities. These favorable longer-term secular dynamic trends are increasing the desirability of its markets.
Also, the high pricing of single-family ownership units continues to drive the demand for rental apartments. Amid this, MAA is well-poised to capture recovery in demand and leasing compared to expensive coastal markets. We expect strong rent growth and stable occupancy to drive revenues.
This Sunbelt-focused apartment REIT opts for opportunistic investments to maintain the right product mix and raise the number of apartment communities in dynamic markets. MAA projects development investments of $200 to $250 million and acquisitions of $213 million for 2022. Such efforts are likely to improve portfolio quality and propel the company’s growth over the long term.
MAA continues to implement its three internal investment programs — interior redevelopment, property repositioning projects and Smart Home installations. The programs will help the company capture the upside potential in rent growth, generate accretive returns and boost earnings from its existing asset base.
The company completed 2,305 interior unit upgrades and installed 652 Smart Home packages in the third quarter. In 2022, MAA plans to complete more than 6,000 interior unit upgrades and approximately 23,000 Smart Home packages. By the end of the year, management projects the total number of smart units to reach 70,000.
Along with the healthy operating fundamentals of Sunbelt markets and a robust development pipeline, the prospects of MAA’s redevelopment program and progress in technology measures are likely to drive margin expansion.
MAA’s current cash flow growth is projected at 39.17% compared with the 14.86% growth projected for the industry. Moreover, this REIT’s trailing 12-month return on equity (ROE) highlights its growth potential. The company’s ROE of 10.60% compares favorably with the industry’s 4.78%, reflecting that MAA is more efficient in using shareholders’ funds than its peers.
Solid dividend payouts are arguably the biggest enticements for REIT shareholders, and MAA remains committed to that. Recently, MAA’s board of directors approved an increase in the company’s quarterly dividend payment. The company will now pay out $1.40 per share, which reflects a hike of 12% from the prior dividend of $1.25.
Based on the increased rate, the annual dividend comes to $5.60 per share, denoting an increase of 60 cents per share from the prior dividend level. The new dividend will be paid out on Jan 31, 2023 to shareholders of record as of Jan 13, 2023.
The recent hike reflects MAA’s ability to generate solid income through its operating platform and high-quality portfolio. MAA has delivered 13 years of consecutive dividend increases. The company increased its dividend seven times in the past five years, and the five-year annualized dividend growth rate is 4.95%. Check Mid-America Apartment’s dividend history here.
However, inflationary pressures and supply-chain woes are expected to push property operating expenses higher. Also, rate hikes add to the company’s woes.
Some better-ranked stocks from the REIT sector are VICI Properties Inc. (VICI - Free Report) and Lamar Advertising Company (LAMR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for VICI Properties’ 2022 FFO per share has moved 4.9% north to $1.92 over the past month.
The Zacks Consensus Estimate for Lamar Advertising Company’s ongoing year’s FFO per share has been raised 1.4% over the past two months to $7.34.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Is Mid-America Apartment (MAA) an Apt Portfolio Pick Right Now?
Headquartered in Germantown, TN, Mid-America Apartment Communities (MAA - Free Report) — commonly known as MAA — is engaged in owning, managing, acquiring, developing and redeveloping quality apartment communities, mainly in the Southeast, Southwest and Mid-Atlantic regions of the United States.
Shares of this residential REIT have risen 1.1% so far in the quarter against the industry’s decline of 5.1%.
Image Source: Zacks Investment Research
MAA is experiencing a favorable estimate revision trend. Estimates for the fourth quarter and current-year funds from operations (FFO) per share have moved north over the past month to $2.28 and 8.46, respectively. Projected FFO per share growth rates for the fourth quarter and 2022 are 20.0% and 20.7%, respectively.
MAA’s diversified Sunbelt portfolio was less severely affected by the pandemic and the economic shutdown. Rather, the pandemic has accelerated employment shifts and a population inflow into the company’s markets as renters seek more business-friendly, lower-taxed and low-density cities. These favorable longer-term secular dynamic trends are increasing the desirability of its markets.
Also, the high pricing of single-family ownership units continues to drive the demand for rental apartments. Amid this, MAA is well-poised to capture recovery in demand and leasing compared to expensive coastal markets. We expect strong rent growth and stable occupancy to drive revenues.
This Sunbelt-focused apartment REIT opts for opportunistic investments to maintain the right product mix and raise the number of apartment communities in dynamic markets. MAA projects development investments of $200 to $250 million and acquisitions of $213 million for 2022. Such efforts are likely to improve portfolio quality and propel the company’s growth over the long term.
MAA continues to implement its three internal investment programs — interior redevelopment, property repositioning projects and Smart Home installations. The programs will help the company capture the upside potential in rent growth, generate accretive returns and boost earnings from its existing asset base.
The company completed 2,305 interior unit upgrades and installed 652 Smart Home packages in the third quarter. In 2022, MAA plans to complete more than 6,000 interior unit upgrades and approximately 23,000 Smart Home packages. By the end of the year, management projects the total number of smart units to reach 70,000.
Along with the healthy operating fundamentals of Sunbelt markets and a robust development pipeline, the prospects of MAA’s redevelopment program and progress in technology measures are likely to drive margin expansion.
MAA’s current cash flow growth is projected at 39.17% compared with the 14.86% growth projected for the industry. Moreover, this REIT’s trailing 12-month return on equity (ROE) highlights its growth potential. The company’s ROE of 10.60% compares favorably with the industry’s 4.78%, reflecting that MAA is more efficient in using shareholders’ funds than its peers.
Solid dividend payouts are arguably the biggest enticements for REIT shareholders, and MAA remains committed to that. Recently, MAA’s board of directors approved an increase in the company’s quarterly dividend payment. The company will now pay out $1.40 per share, which reflects a hike of 12% from the prior dividend of $1.25.
Based on the increased rate, the annual dividend comes to $5.60 per share, denoting an increase of 60 cents per share from the prior dividend level. The new dividend will be paid out on Jan 31, 2023 to shareholders of record as of Jan 13, 2023.
The recent hike reflects MAA’s ability to generate solid income through its operating platform and high-quality portfolio. MAA has delivered 13 years of consecutive dividend increases. The company increased its dividend seven times in the past five years, and the five-year annualized dividend growth rate is 4.95%. Check Mid-America Apartment’s dividend history here.
However, inflationary pressures and supply-chain woes are expected to push property operating expenses higher. Also, rate hikes add to the company’s woes.
MAA currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Stocks to Consider
Some better-ranked stocks from the REIT sector are VICI Properties Inc. (VICI - Free Report) and Lamar Advertising Company (LAMR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for VICI Properties’ 2022 FFO per share has moved 4.9% north to $1.92 over the past month.
The Zacks Consensus Estimate for Lamar Advertising Company’s ongoing year’s FFO per share has been raised 1.4% over the past two months to $7.34.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.