Stocks of prefabricated houses to buy
The mobile or “double-width” homes you remember “back then” followed the path of the dodo bird. Since 1976, they have been replaced by modern manufactured homes, according to the Department of Housing and Urban Development (HUD).
What exactly is a prefabricated house? These are prefabricated houses built in the factory and then transported to a specific reception site, assembled on a permanent frame or a steel frame.
Why Consider Adding Manufactured Home Stocks to Your Portfolio? Four words: tumultuous real estate prices.
Some housing market trends expected for 2022: You will see a decline in the inventory of available homes and rising prices will remain an issue for many who want to buy. Interest rates will go up. The rental market will see continued growth, but will likely stabilize. Construction of new homes will face labor and supply challenges.
Why invest in a prefabricated house?
Manufactured homes are cheaper for consumers to buy. Given that real estate prices have reached historic highs over the past year, manufactured homes allow consumers to take advantage of lower unit prices, lower maintenance costs and high capitalization rates, which which also makes investing in prefabricated houses attractive to investors. Manufactured homes have the lowest unit cost of all real estate asset classes.
Additionally, the appeal of manufactured home communities is undeniable for baby boomers, who often have to rethink their retirement lifestyle because they haven’t saved enough. In fact, according to a survey by the Insurance Retirement Institute, older workers have been undersaving – 51% have less than $50,000 saved for retirement and only 44% believe they will have enough income throughout their lifetime. retirement.
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Let’s take a look at some fabricated stocks and community real estate investment trusts (REITs) that you might want to add to your portfolio.
UMH Properties Inc. (NYSE: UMH)
UMH Properties, Inc., headquartered in Freehold, New Jersey, operates as a REIT and owns and operates manufactured home communities. The company leases manufactured home sites to private manufactured home owners and designs single-family manufactured homes, produced offsite by manufacturers and installed on sites within communities.
The company owns and operates a portfolio of 127 manufactured home communities with approximately 24,000 developed residential sites, in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Maryland, Michigan, Alabama and South Carolina. UMH also owns and operates a community in Florida. The Florida community contains 219 locations, through a joint venture with Nuveen Real Estate. UMH also owns approximately 1,800 acres of land to develop new venues.
UMH Properties, Inc. reported total revenue for the quarter ended September 30, 2021 of $48 million (vs. $43.1 million) for the third quarter. Net loss attributable to common shareholders was $3.4 million ($0.07 per diluted share) for the quarter ended September 30, 2021, compared to $12.7 million ($0.31 per diluted share) for the quarter ended September 30, 2020.
Funds from operations attributable to common shareholders was $10.8 million ($0.22 per diluted share) for the three months ended September 30, 2021, compared to $4.5 million ($0. $11 per diluted share) for the three months ended September 30, 2020. Normalized funds from operations attributable to common shareholders was $11.1 million ($0.23 per diluted share) for the third quarter, compared to $7.4 million ($0.18 per diluted share) for the quarter ended September 30, 2020.
UFP Industries Inc. (NASDAQ: UFPI)
UFP Industries Inc., headquartered in Grand Rapids, Michigan, was founded in 1955 as a supplier of lumber to the manufactured home industry. Today, it manufactures and distributes lumber and wood substitute products in its retail, industrial and construction segments through national home center retailers, sales-focused regional lumber yards retail and contractor-oriented lumber courses. It manufactures pallets, specialty crates, wooden crates and other containers used for packaging, shipping and handling purposes. The construction segment is involved in prefabricated houses, residential constructions built in place, concrete formwork and commercial constructions, which represent the business units.
The company reported net revenue of $8.6 billion for fiscal 2021 and reported record earnings per diluted share of $8.59, a 115% increase over the prior year . In the fourth quarter of fiscal 2021, net sales were $2 billion, an increase of 45% over the fourth quarter of 2020. Earnings per diluted share were $2.21, or an increase of 117% compared to the fourth quarter of 2020.
Net sales of $2.02 billion increased 45% due to a 5% increase in organic unit sales, a 20% increase in unit sales from acquisitions and a 20% increase in % of wood prices. Operating profit of $195 million increased 121% and acquisitions contributed $19 million to profit.
In fiscal 2021, net sales increased 68% due to an increase in organic unit sales, totaling $8.64 billion, which includes a 24% increase in unit sales from acquisitions and a 40% increase in wood prices. Operating income of $737.6 million increased 113% and new product sales reached $842 million, up 56%.
Sun Communities Inc. (NYSE: SUI)
Sun Communities Inc., headquartered in Southfield, Michigan, provides property management services across multiple segments, including real estate operations and home sales and rentals. The company owns, operates and develops manufactured housing communities and recreational vehicle communities across the United States. It also acquires, operates and expands manufactured home and recreational vehicle communities.
Third quarter results showed an increase in total revenue of $283.8 million, or 70.9%, to approximately $684.3 million. Company revenue was $400.5 million for the same period in 2020. Net income attributable to common shareholders increased $150.6 million, or 185.4%, to approximately 231 $.8 million, or $2 per diluted common share, on net income attributable to common shareholders of $81.2 million. , or $0.83 per diluted common share, for the same period in 2020.
For the nine months ended September 30, 2021, total revenue increased $716.1 million, or 70.6%, to $1.7 billion from approximately $1 billion for the same period in 2020 Net income attributable to common shareholders increased $243.3 million, or 196.2%, to approximately $367.3 million.
Consider investing in prefab homes and communities
Investing in prefabricated homes can be a great direction for your portfolio. Just consider investing in manufactured homes and communities as part of a diversified and balanced portfolio.
Should you invest $1,000 in Sun Communities right now?
Before you consider Sun Communities, you’ll want to hear this.
MarketBeat tracks Wall Street’s top-rated, top-performing research analysts daily and the stocks they recommend to their clients. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the market takes off…and Sun Communities was not on the list.
Although Sun Communities currently has a “Buy” rating among analysts, top-rated analysts believe these five stocks are better buys.
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