July 10, 2025 a 07:31 am
UDR: Dividend Analysis - UDR, Inc.
UDR, Inc. boasts a solid dividend record with 41 consecutive years of distributions, showcasing its commitment to returning value to shareholders. Despite an elevated EPS payout ratio, the company's consistent free cash flow generation may support ongoing dividends. Investors should monitor the company's ability to sustain its dividend growth in light of its financial metrics.
Overview
| Key Metric | Details |
|---|---|
| Sector | Real Estate |
| Dividend Yield | 5.24% |
| Current Dividend Per Share | 1.71 USD |
| Dividend History | 41 years |
| Last Cut or Suspension | None |
Dividend History
The dividend history of UDR, Inc. underscores its commitment to steady dividend payments. This reliability can be an attractive feature for income-focused investors.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.285 |
| 2024 | 1.695 |
| 2023 | 1.64 |
| 2022 | 1.5025 |
| 2021 | 1.4475 |
Dividend Growth
Dividend growth is crucial as it indicates a company's ability to enhance shareholder returns over time. UDR's modest growth rates suggest a focus on maintaining rather than accelerating dividends.
| Time | Growth |
|---|---|
| 3 years | 5.40% |
| 5 years | 4.66% |
The average dividend growth is 4.66% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio
Understanding payout ratios helps assess how much of the earnings are being returned to shareholders as dividends. A high EPS payout ratio may suggest limited room for growth in dividends or reinvestment in the business.
| Key Figure | Ratio (%) |
|---|---|
| EPS-based | 459.27% |
| Free cash flow-based | 86.48% |
The exceptionally high EPS-based payout ratio suggests dividends are funded beyond earnings, indicating a potential sustainability issue if continued over the long term, while the FCF-based ratio is more sustainable.
Cashflow & Capital Efficiency
These metrics are critical for understanding a company's operational efficiency and its ability to generate cash to support dividends and growth initiatives.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 4.23% | 4.13% | 4.69% |
| Earnings Yield | 0.63% | 3.53% | 0.70% |
| CAPEX to Operating Cash Flow | 0% | 37.51% | 28.78% |
| Stock-based Compensation to Revenue | 1.95% | 2.02% | 1.81% |
| Free Cash Flow / Operating Cash Flow Ratio | 69.02% | 62.49% | 71.22% |
With solid free cash flow yields, UDR maintains a commendable balance between capex and operating cash flow, indicating efficient capital allocation and cash flow management.
Balance Sheet & Leverage Analysis
Analyzing leverage metrics helps gauge the company's financial stability and its ability to meet long-term obligations, while assessing leverage ratios gives insight into capital structure.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 174.52% | 149.95% | 146.52% |
| Debt-to-Assets | 55.14% | 52.62% | 54.40% |
| Debt-to-Capital | 63.57% | 59.99% | 59.44% |
| Net Debt to EBITDA | 12.10 | 4.43 | 6.56 |
| Current Ratio | 0.39 | 0.29 | 0.20 |
| Quick Ratio | 0.39 | 0.29 | -0.07 |
| Financial Leverage | 316.50% | 284.96% | 269.36% |
The relatively high net debt to EBITDA compared to the sector average may impose constraints during economic downturns, while solid leverage ratios indicate a well-structured balance sheet.
Fundamental Strength & Profitability
Evaluating these metrics helps investors understand the robustness of a company's core operations and its ability to generate profits effectively.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 2.60% | 11.13% | 2.12% |
| Return on Assets | 0.82% | 3.91% | 0.79% |
| Net Margin | 5.36% | 27.30% | 5.73% |
| EBIT Margin | 18.23% | 40.40% | 16.86% |
| EBITDA Margin | 58.52% | 82.91% | 60.28% |
| Gross Margin | 68.62% | 66.25% | 21.82% |
UDR demonstrates steady profitability, with consistent returns on equity and assets, fostering confidence in its profitability despite variable net margins across years.
Price Development
Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 2 | |
| Financial Stability | 3 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Final Score: 29/40
Rating
UDR, Inc. shows a keen commitment to maintaining its dividend, which is appealing to income investors. While its dividends are well-established, the sustainability of its dividends should be monitored given the high payout ratios. Overall, UDR remains a moderate buy for long-term dividend investors who prioritize income stability alongside potential growth prospects.