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Sun Communities Inc SUI

Morningstar Rating
$132.74 −1.02 (0.76%)
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Company Report

Sun Communities Earnings: Growth Reported in Q4 and Forecast for 2024 Higher Than Anticipated

Sun Communities reported fourth-quarter results that were ahead of our estimates, giving us confidence in our $170 fair value estimate for the no-moat company. Same-store occupancy for the manufactured housing portfolio increased 70 basis points year over year to 97.3%, slightly better than our 97.0% estimate, and same-store revenue was up 8.6%, also slightly better than our estimate of 8.3% growth. Revenue for the residential vehicle segment was up 2.1% as the membership portion grew 15.8% while the transient portion declined 17.7%. Finally, the marina segment saw revenue growth of 8.2% in the fourth quarter. Combined, same-store revenue growth for the whole company was 6.3% in the fourth quarter. Meanwhile, operating expenses for the same-store portfolio were only up 0.3% as supplies and repairs fell 16.3% and utility costs were down 8.3%. As a result, total same-store net operating income, or NOI, grew 9.6% in the fourth quarter. Sun reported core funds from operations, or FFO, of $1.34 per share, which was ahead of our $1.25 estimate.

Price vs Fair Value

SUI is trading at a 22% discount.
Price
$132.74
Fair Value
$762.00
Uncertainty
Medium
1-Star Price
$585.60
5-Star Price
$793.00
Economic Moat
Qvnjc
Capital Allocation
Xvtqrpwv

Bulls Say, Bears Say

Bulls

Aging population supports rent and NOI growth at a spread above inflation.

Bears

Demand for the sector has already peaked and will flatten out as the target demographic turns 80, which will cause many to sell their residences as they instead move to senior housing facilities.

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News

Trading Information

Previous Close Price
$133.76
Day Range
$130.97133.86
52-Week Range
$102.74146.94
Bid/Ask
$129.45 / $133.50
Market Cap
$16.52 Bil
Volume/Avg
806,484 / 856,678

Key Statistics

Price/Earnings (Normalized)
72.20
Price/Sales
5.17
Dividend Yield (Trailing)
2.80%
Dividend Yield (Forward)
2.83%
Total Yield
2.88%

Company Profile

Sun Communities Inc is a residential REIT that focuses on owning manufactured housing, residential vehicle communities, and marinas. The company currently owns a portfolio of 670 properties, which includes 353 manufactured housing communities, 182 residential vehicle communities, and 135 marina properties. Sun targets owning properties that are desirable as second homes or vacation properties with nearly 50% of the portfolio located in either Florida or Michigan near major bodies of water.
Sector
Real Estate
Industry
REIT - Residential
Stock Style Box
Mid Core
Total Number of Employees
6,780

Comparables

Valuation

Metric
SUI
ELS
LXP
Price/Earnings (Normalized)
72.2038.761,012.39
Price/Book Value
2.338.731.20
Price/Sales
5.179.317.47
Price/Cash Flow
17.5822.5412.52
Price/Earnings
SUI
ELS
LXP

Financial Strength

Metric
SUI
ELS
LXP
Quick Ratio
0.180.093.05
Current Ratio
0.260.133.12
Interest Coverage
0.203.341.76
Quick Ratio
SUI
ELS
LXP

Profitability

Metric
SUI
ELS
LXP
Return on Assets (Normalized)
2.00%6.18%1.70%
Return on Equity (Normalized)
4.54%23.96%3.12%
Return on Invested Capital (Normalized)
4.07%8.90%3.03%
Return on Assets
SUI
ELS
LXP
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REIT - Residential Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
AVB
AvalonBay Communities IncGpmhw$25.3 Bil
EQR
Equity ResidentialKcgr$23.1 Bil
INVH
Invitation Homes IncCpbx$21.1 Bil
ESS
Essex Property Trust IncPnr$15.0 Bil
MAA
Mid-America Apartment Communities IncZpv$14.9 Bil
AMH
American Homes 4 Rent Class ALxgnl$13.5 Bil
ELS
Equity Lifestyle Properties IncTbd$12.5 Bil
UDR
UDR IncQvwp$11.8 Bil
AIRC
Apartment Income REIT Corp Class ALmdz$4.5 Bil

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