It's been a great afternoon session for UDR investors, who saw their shares rise 1.8% to a price of $42.23 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
UDR Has Elevated P/B and P/E Ratios:
UDR, Inc. (NYSE: UDR), an S&P 500 company, is a leading multifamily real estate investment trust with a demonstrated performance history of delivering superior and dependable returns by successfully managing, buying, selling, developing and redeveloping attractive real estate communities in targeted U. The company belongs to the Real Estate sector, which has an average price to earnings (P/E) ratio of 24.81 and an average price to book (P/B) ratio of 2.24. In contrast, UDR has a trailing 12 month P/E ratio of 136.2 and a P/B ratio of 3.59.
When we divide UDR's P/E ratio by its expected EPS growth rate of the next five years, we obtain its PEG ratio of -2.47. Since it's negative, the company has negative growth expectations, and most investors will probably avoid the stock unless it has an exceptionally low P/E and P/B ratio.
Growing Revenues With Increasing Reinvestment in the Business:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $1,152 | $1,241 | $1,291 | $1,517 |
| Operating Margins | 18.8% | 10.6% | 10.5% | 15.5% |
| Net Margins | 16.05% | 5.18% | 11.62% | 5.73% |
| Net Income (MM) | $185 | $64 | $150 | $87 |
| Net Interest Expense (MM) | -126 | -147 | -129 | -163 |
| Net Interest Expense (MM) | -$126 | -$147 | -$129 | -$163 |
| Depreciation & Amort. (MM) | -$7 | -$10 | -$13 | -$14 |
| Earnings Per Share | $0.63 | $0.2 | $0.48 | $0.31 |
| EPS Growth | n/a | -68.25% | 140.0% | -35.42% |
| Diluted Shares (MM) | 286 | 295 | 302 | 329 |
| Free Cash Flow (MM) | $446 | $430 | $497 | $584 |
| Capital Expenditures (MM) | -$184 | -$174 | -$167 | -$236 |
| Net Current Assets (MM) | -$4,972 | -$5,094 | -$5,558 | -$6,015 |
| Current Ratio | 0.8 | 1.22 | 1.12 | 0.2 |
| Long Term Debt (MM) | $4,708 | $4,977 | $5,413 | $5,487 |
| Net Debt / EBITDA | 15.61 | 23.18 | 19.29 | 21.99 |
