UMH Preferred: A 7.3% Yield And A Discount To Par
UMH Properties' Series D preferred shares (UMH.PR.D) trade at a ~12.5% discount to par, offering a current yield of approximately 7.3%, with strong funds from operations (FFO) coverage supporting dividend reliability. The REIT benefits from resilient demand in manufactured housing, a sector favored by affordability trends, despite broader interest rate pressures. The shares have limited upside due to callability at par, warranting active monitoring for potential reallocation if prices converge. The investment is currently rated as a buy, emphasizing capital appreciation potential alongside income generation.
- ▪UMH.PR.D preferred shares yield about 7.3% and are trading roughly 12.5% below their par value.
- ▪Dividend payments on the preferred shares are well-covered by FFO, with coverage ratios estimated at 4–5x.
- ▪The manufactured housing sector remains in demand due to its affordability, supporting stable cash flows for UMH Properties.
- ▪The upside for UMH.PR.D is capped at par value because the shares are callable, limiting long-term capital gains.
- ▪The author rates UMH.PR.D as a buy but advises monitoring for price convergence and timely redeployment of capital.
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