Breaking Down UMH Properties, Inc. (UMH) Financial Health: Key Insights for Investors

You're looking at UMH Properties, Inc. (UMH) and trying to map the real value in this affordable housing Real Estate Investment Trust (REIT) against the market's current skepticism, and honestly, the numbers tell a story of operational strength that's hard to ignore. For the third quarter of 2025, UMH delivered a 10% jump in total income, hitting $66.9 million, which is a solid top-line performance, but the real punch is in the core operations: same-property Net Operating Income (NOI)-that's the profit from existing properties before debt and taxes-surged by 12%. Still, the market is cautious because the full-year 2025 Normalized Funds From Operations (FFO) guidance midpoint of $1.00 per diluted share is spread across a larger share count, a classic REIT growth trade-off. Here's the quick math: that $\mathbf{\$1.00}$ FFO per share guidance easily covers the current annual dividend of $\mathbf{\$0.90}$ per share, giving you a clear margin of safety and a compelling dividend yield. We need to dig into how they manage that $\mathbf{\$673}$ million in total debt while continuing to grow occupancy to $\mathbf{88.5\%}$.

Revenue Analysis

You're looking for a clear picture of UMH Properties, Inc. (UMH)'s financial engine, and the Q3 2025 results give us exactly that. The direct takeaway is that UMH is successfully driving revenue growth through its core manufactured housing community business, posting a total income of $66.9 million for the quarter ended September 30, 2025. This performance is solid, but you need to see where that money is actually coming from.

Primary Revenue Streams and Segment Contribution

UMH is a Real Estate Investment Trust (REIT), so its revenue streams are relatively straightforward, but the proportions matter. The vast majority of its income comes from renting out the land sites and the manufactured homes themselves. Here's the quick math for Q3 2025: Total Revenue was $66.9 million. Of that, $57.8 million came from Rental and Related Income. The rest is primarily from the sale of new manufactured homes to tenants or third parties.

• Rental and Related Income: This is the dominant, high-margin revenue source, accounting for about 86.4% of Q3 2025 total income.
• Gross Sales of Manufactured Homes: This segment brought in approximately $9.1 million in Q3 2025, which is the remaining 13.6% of total income.

Year-over-Year Revenue Growth

The company is defintely on an upward trajectory. For the third quarter of 2025, UMH Properties, Inc. reported a 10% increase in total income compared to the same period in 2024, when total income was $60.7 million. This isn't just a one-off jump; the nine months ended September 30, 2025, saw total revenue of $194.79 million, up from $178.68 million in the prior year period. The growth is being fueled by both segments, but the rental side is the powerhouse.

Here's a look at the key growth drivers in Q3 2025:

• Rental and Related Income increased by 11%.
• Same-Property Net Operating Income (NOI) grew by 12%, showing strong operational efficiency.
• Gross Sales of Manufactured Homes saw a 5% increase in Q3 2025, reaching $9.1 million.

Analysis of Significant Revenue Changes

The most significant change isn't a shift in the type of revenue, but rather the accelerated growth and the underlying operational metrics. The 11% jump in Rental and Related Income in Q3 2025 is a direct result of two things: rent increases-management affirmed 5% rent increases-and higher same-property occupancy, which was up 110 basis points to 88.5%. This tells you the company is executing its core strategy of filling sites and raising rents. The home sales segment, while smaller, is crucial because it converts inventory into occupied, rent-paying sites, which then feeds the larger, more stable rental income stream. For a deeper dive into the investor base driving this, check out Exploring UMH Properties, Inc. (UMH) Investor Profile: Who's Buying and Why?

What this estimate hides, however, is the capital required to achieve this growth. UMH still has substantial annual capital needs-estimated at $120 million to $150 million-to acquire new communities and develop sites, which is a constant drain on cash flow. Still, the market is expecting the full fiscal year 2025 revenue to hit around $263.37 million, representing a solid 9.49% year-over-year growth.

Your next step should be to look at the corresponding operating expenses to see if that 12% NOI growth is sustainable.

Profitability Metrics

You want to know if UMH Properties, Inc. (UMH) is a profitable bet, and the short answer is that while revenue is up, net profitability is still volatile, but operational efficiency is defintely improving. The company is successfully driving revenue growth, but rising costs-especially interest expense in this high-rate environment-are compressing the bottom-line net profit (Net Income) in the near-term.

Gross, Operating, and Net Profit Margins (Q2 2025)

Looking at the second quarter of 2025, UMH Properties, Inc. showed solid margins before accounting for non-operating costs like interest and taxes. Here's the quick math using the quarter's Sales Revenues of $66.51 million:

• Gross Profit Margin: The Gross Profit on Sales was $36.34 million, translating to a Gross Profit Margin of approximately 54.6%. This is a strong indicator of core real estate rental and sales business health.
• Operating Profit Margin: The Operating Profit was $12.5 million, giving an Operating Profit Margin of about 18.8%. This margin shows the cost of running the business, like administrative expenses, is well-managed relative to the gross profit.
• Net Profit Margin: The Net Income for the quarter was $7.66 million, resulting in a Net Profit Margin of roughly 11.5%. This is the final takeaway profit, and it's where the impact of debt financing costs really hits.

The trailing twelve months (TTM) net profit margin ending September 30, 2025, was slightly lower at approximately 10.4%, based on a TTM Net Profit of $26.79 million against Current Revenue of $256.7 million.

Profitability Trends and Volatility

The trend in reported net income for UMH Properties, Inc. over the first three quarters of 2025 shows real volatility, which is a key risk for investors to monitor. You see a clear swing from a small loss to a profit, and then a drop in the third quarter.

• Q1 2025: The company reported a Net Loss Attributable to Common Shareholders of $271,000.
• Q2 2025: Net Income rebounded to $7.66 million.
• Q3 2025: Net Income Attributable to Common Shareholders dropped to $4.2 million, despite total income rising to $66.9 million.

What this estimate hides is the significant impact of rising interest rates on a growth-focused REIT that relies on debt financing. The drop in quarterly net income, even with rising revenue, points directly to margin compression from higher borrowing costs.

Operational Efficiency and Industry Benchmarking

For a Real Estate Investment Trust (REIT), operational efficiency is best measured by Net Operating Income (NOI) growth and occupancy, not just net profit. Here, UMH Properties, Inc. is showing strong execution, which is a big positive and aligns with their Mission Statement, Vision, & Core Values of UMH Properties, Inc. (UMH).

In Q3 2025, UMH's same-property Net Operating Income (NOI) growth was an impressive 12.1%, which beats its peers and highlights effective cost management and rent increases. The company's operating expense ratio improved to 39.7% from 41.1% in the prior year, a clear sign of better cost control.

However, when comparing to major Manufactured Housing REIT peers, there's a clear runway for occupancy improvement:

UMH Properties, Inc.'s lower occupancy of 88.5% is actually an opportunity; it means they have more vacant sites to fill, which is driving that outsized 12.1% same-property NOI growth. This operational momentum is strong, but the overall profitability picture remains clouded by the high cost of capital.

Debt vs. Equity Structure

You're looking for a clear picture of how UMH Properties, Inc. (UMH) funds its growth, and the data from the 2025 fiscal year shows a deliberate, balanced approach common among Real Estate Investment Trusts (REITs). The quick takeaway is that UMH is leaning more on equity than debt compared to some peers, which is a sign of balance in a high-interest rate environment.

As of recent 2025 data, UMH Properties, Inc. carries a total debt load of approximately $672.54 million, which is primarily long-term mortgages payable. This is a capital-intensive business, so debt is defintely part of the equation, but it's crucial to see it against the company's total equity. For context, the company's total shareholder equity stands at about $924.69 million.

Here's the quick math on the leverage:

• Total Debt: $672.54 million
• Total Equity: $924.69 million
• Debt-to-Equity Ratio: 0.73 (or 73%)

A Debt-to-Equity (D/E) ratio of 0.73 means UMH Properties, Inc. has 73 cents of debt for every dollar of shareholder equity. To be fair, this ratio is on the lower side for a REIT, especially in the manufactured housing sector, which is a good thing for risk management. For instance, a key peer's net debt to total market capitalization sits at 19.3%, while UMH's was 23.1% at the end of Q1 2025. UMH's ratio is manageable, but investors should still monitor its interest coverage ratio, which recently stood at 2.7x.

UMH Properties, Inc. has been active in the capital markets in 2025, using a mix of debt and equity to fuel its expansion and capital needs, which are estimated to be between $120 million and $150 million annually. The company is adept at tapping diverse funding sources. This year, they completed a significant Fannie Mae refinancing of ten communities, generating $101.4 million in proceeds at a fixed interest rate of 5.855%. Also, in July 2025, UMH raised another $80.2 million through the issuance of 5.85% Series B Bonds due in 2030, specifically targeting Israeli investors.

The company's capital structure shows a clear balance between debt financing and equity funding. As of the third quarter of 2025, UMH Properties, Inc.'s $2.16 billion enterprise value is funded by a significant equity cushion: 58% common equity and 15% preferred equity, leaving just 27% for net debt. This preference for equity over debt is a smart move in a rising interest rate environment, providing a buffer against market volatility and higher borrowing costs. You can dive deeper into the operational performance that supports this financial structure by reading Breaking Down UMH Properties, Inc. (UMH) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need to know if UMH Properties, Inc. (UMH) can cover its near-term obligations, and the quick answer is a resounding yes; their liquidity position is defintely robust, driven by a high current ratio and strong operating cash flow. For the nine months ended September 30, 2025, the company's financial structure shows a healthy ability to manage short-term debt, but the cash flow statement reveals a heavy capital deployment strategy typical of a growing real estate investment trust (REIT).

Assessing UMH Properties, Inc.'s liquidity starts with the key ratios. The Current Ratio, which measures a company's ability to pay short-term liabilities with short-term assets, is exceptionally strong. Based on the third quarter 2025 data, UMH Properties, Inc. held current assets of $136.17 million against current liabilities of only $19.85 million. Here's the quick math: that gives us a Current Ratio of approximately 6.86:1. A ratio above 2.0 is often considered excellent, so 6.86:1 is powerful. Still, for a REIT, this ratio can be naturally high because most of their assets are long-term real estate holdings, which aren't counted as current assets.

The Quick Ratio (or acid-test ratio) offers a more conservative view by excluding inventory, which can be harder to convert to cash quickly. UMH Properties, Inc.'s Quick Ratio stands at approximately 2.25. This is still a very comfortable position. It means that even without selling off their manufactured home inventory, they can cover their immediate bills more than twice over. This is a clear strength, showing minimal near-term default risk.

The working capital-current assets minus current liabilities-also paints a positive picture. For Q3 2025, UMH Properties, Inc.'s working capital was approximately $116.32 million. This significant positive balance means the company has ample cushion to fund its daily operations and manage unexpected expenses without needing immediate external financing. What this estimate hides, however, is the constant need for capital in a growth-focused REIT, which you see play out in the cash flow statement.

Looking at the cash flow statements for the first nine months of 2025 provides the real story of capital deployment:

• Operating Cash Flow: A strong inflow of $60.64 million. This is the lifeblood of the business, showing the core manufactured housing community operations are generating significant cash.
• Investing Cash Flow: A substantial net outflow of $164.74 million. This is a massive capital burn, but it's intentional. It reflects the company's aggressive strategy of property acquisitions and capital expenditures (capex) to expand their portfolio and add new rental homes, which is crucial for future revenue growth.
• Financing Cash Flow: A net inflow of $37.38 million. This inflow is largely due to issuing new bonds and common stock, which helps fund the large investing outflow. They raised $80.2 million through new 5.85% bonds alone in the third quarter of 2025.

The key takeaway here is that UMH Properties, Inc. is operating from a position of liquidity strength, but they are actively choosing to spend all that cash, plus more from financing, on growth. The risk is not in their ability to meet current obligations, but in the execution and return on investment of that $164.74 million in capital expenditures. For a more detailed look at the company's full financial picture, including valuation and strategy, you can read our full analysis: Breaking Down UMH Properties, Inc. (UMH) Financial Health: Key Insights for Investors.

Valuation Analysis

You need a clear-eyed view on whether UMH Properties, Inc. (UMH) is a value play or a trap. Right now, the market is sending mixed signals, but the core takeaway is this: UMH trades at a premium on earnings, suggesting it's overvalued by traditional metrics, but its operational strength and high dividend yield provide a floor. The analyst consensus is a collective shrug-a Hold rating.

The stock's closing price as of November 21, 2025, was $15.25. Over the last 12 months, the stock has dropped -20.37%, with a 52-week range between a low of $13.95 and a high of $20.03. That's a significant correction, but the valuation ratios still point to a rich price tag.

Is UMH Overvalued or Undervalued?

The quick math suggests UMH is expensive based on earnings, but you have to remember this is a Real Estate Investment Trust (REIT), so Funds From Operations (FFO) is the better metric. Still, the headline numbers are striking. The Forward Price-to-Earnings (P/E) ratio is high at 83.93, which is well above the market and sector averages, indicating investors are pricing in massive future earnings growth that may not materialize quickly. The Enterprise Value-to-EBITDA (EV/EBITDA) ratio, a cleaner look at total company value relative to operating profit, sits at 17.50. This is not cheap.

On the asset side, the Price-to-Book (P/B) ratio is 2.16. This means the stock trades for more than twice its book value per share, which is a premium, but not an egregious one for a REIT with a growing portfolio of manufactured home communities. What this estimate hides is the true value of their land and properties, which often appreciates beyond historical book value. You're paying for the real estate scarcity and the operational growth, defintely.

Dividend Health and Analyst Outlook

The dividend is a major draw for UMH. The annual dividend is $0.90 per share, translating to a robust dividend yield of 5.90% at the current price. That's a powerful income stream. The problem is the payout ratio, which is a flashing yellow light. Based on last year's earnings per share, the payout ratio is an unsustainable 1,106.2%. However, for a REIT, the payout ratio based on Adjusted Earnings is a more realistic 93.7%, which is still high and leaves little room for error or reinvestment. It's a tight squeeze.

Wall Street's consensus is a Hold rating, with an average 12-month price target of $18.50. This target suggests an upside of about 21.0% from the current stock price, meaning analysts believe a significant rebound is possible, but they aren't confident enough to issue a strong Buy. They are waiting for the operational growth-like the 15% rise in normalized funds from operations reported in Q3 2025-to fully translate into sustainable earnings.

Here are the key takeaways from the analyst view:

• Consensus Rating: Hold
• Average Price Target: $18.50
• Implied Upside: 21.0%
• Dividend Yield: 5.90%

For a deeper dive into who is buying this stock and why they are willing to accept the high valuation, you should check out Exploring UMH Properties, Inc. (UMH) Investor Profile: Who's Buying and Why?

Risk Factors

You need to understand that even with UMH Properties, Inc.'s (UMH) strong Normalized Funds From Operations (FFO) growth-up 4% per diluted share to $0.25 in Q3 2025-there are clear risks that could erode those gains. The core challenge is balancing aggressive growth with rising costs and capital market volatility. You must look beyond the top-line revenue, which hit $66.9 million in Q3 2025, and focus on the margin pressures.

The biggest near-term risk is financial: the cost of capital. While UMH has done a good job locking in debt-about 99% of their total debt of $673 million is fixed-rate with a weighted average interest rate of only 4.83%-new financing is more expensive. For instance, their recent Series B Bonds were issued at a 5.85% rate. This higher cost for new debt will compress margins on future acquisitions, making it harder to generate the same returns. Honestly, the higher-for-longer interest rate environment is the single biggest headwind for all REITs like UMH.

Operational and external risks are also significant, especially in a capital-intensive business like manufactured housing. UMH is a growth-by-acquisition story, but execution is everything. Here's the quick math on what to watch:

• Inflation and Margin Squeeze: Community operating expenses jumped 11% in Q3 2025. This increase, driven by rising payroll and real estate taxes, directly pressures the Net Operating Income (NOI).
• Supply Chain and Occupancy: The company faces a backlog of approximately six months for new home setups. This delay means vacant sites aren't generating rental income as fast as planned, which slows the critical process of filling their communities.
• Buyer Financing Risk: Sales of manufactured homes, which generated $9.1 million in Q3 2025, are sensitive to the ability of buyers to secure financing. If interest rates make home loans too expensive, sales volume drops.

Another unique strategic risk is the company's investment in a portfolio of marketable equity securities issued by other REITs. As of September 30, 2025, this portfolio carried $38.7 million in net unrealized losses. While it represents a small portion-about 2.5% of undepreciated assets-it introduces unnecessary capital markets volatility to a real estate investment trust.

To be fair, UMH has clear mitigation strategies. The significant annual capital needs, which run between $120 million to $150 million, are partially managed through joint ventures with Nuveen Real Estate. These joint ventures allow UMH to pursue development deals, like the 587 sites acquired year-to-date in 2025 for about $41.8 million, while reducing their direct capital outlay. Plus, their long-term focus on affordable housing, as outlined in their Mission Statement, Vision, & Core Values of UMH Properties, Inc. (UMH), positions them well against the widening gap between conventional home ownership and renting.

Your action item is to defintely monitor the same-property operating expense ratio and the pace of home installations. If that 11% expense growth rate doesn't slow, it will eat into the NOI gains from rent increases.

Growth Opportunities

You're looking for a clear path forward for UMH Properties, Inc. (UMH), and the core takeaway is this: their future growth is less about massive acquisitions and more about extracting value from their existing land bank and innovative housing solutions. It's a disciplined, internally-driven growth model that capitalizes on the massive, persistent demand for affordable housing in the US.

Key Growth Drivers: Filling the Pipeline

The biggest driver for UMH isn't a new product; it's filling their existing capacity. The company holds a significant competitive advantage with approximately 3,300 existing vacant sites and 2,200 vacant acres of land, primarily in the Northeast and Midwest regions. This allows them to add new rental homes at a low cost-around $70,000 per home-which is highly competitive against traditional construction. For 2025, the strategic initiative is to deploy 700-800 new rental homes, which is projected to generate about $10 million in incremental revenue.

This is a low-risk, high-return strategy. What this estimate hides is the speed of lease-up, but the underlying demand for housing in the $40,000 to $80,000 income bracket is simply enormous. Plus, they are targeting a 5% annual rent increase across their portfolio, which should layer on another estimated $11 million in additional revenue.

• Deploy 700-800 new rental homes in 2025.
• Target a 5% annual rent increase.
• Leverage 3,300 vacant sites for low-cost expansion.

2025 Financial Projections and Strategic Moves

Based on their performance through the third quarter of 2025, UMH is on track to surpass $250 million in total income for the full fiscal year. This growth is supported by a strong operational quarter, where Q3 2025 total income rose 10% year-over-year to $66.9 million. Analysts are forecasting the company's full-year Normalized Funds From Operations (FFO) per diluted share to hit the midpoint of their guidance at about $1.00. To be fair, this is a key metric for real estate investment trusts (REITs) and shows the underlying cash flow strength, even if GAAP net income can be volatile due to non-operational factors.

Here's the quick math on the analyst consensus for the full year:

Their acquisition strategy is focused and value-add. Year-to-date in 2025, UMH has completed the acquisition of five communities, adding 587 sites for a total purchase price of $41.7 million. These are often under-occupied communities in markets like Maryland and Georgia where the company can implement its business plan to drive occupancy and property value over time.

Competitive Advantages and Product Innovations

UMH has a defintely strong competitive moat built on two pillars: vertical integration and product innovation. Unlike many other REITs, UMH is vertically integrated, meaning they don't just lease the land; they also engage in the development, sale, and financing of the manufactured homes themselves. This allows them to control the entire process, capture more revenue streams, and ensure quality standards.

Product-wise, they are pushing the envelope. They are rolling out factory-installed solar shingle homes, which drastically reduces the cost of providing solar energy to residents compared to on-site installation-from about $16,000 down to $6,000 per house. Also, their new single and multi-section duplex units allow them to effectively split a traditional lot into two dwelling units, increasing density and potentially doubling rental revenue per site while keeping the housing cost lower for residents. This is a smart way to maximize returns on existing land.

For a deeper dive into who is investing in this strategy, you should check out Exploring UMH Properties, Inc. (UMH) Investor Profile: Who's Buying and Why?