Mid-America Apartment Communities: A Real Estate Leader Outshining Peers
Mid-America Apartment Communities, Inc. (MAA) is rising above the competition, demonstrating solid growth and promising dividends for investors.
Based in Germantown, Tennessee, MAA operates as a self-administered and self-managed real estate investment trust. This company specializes in owning, developing, acquiring, and operating multi-family apartment communities throughout the southeast and mid-west U.S. and Texas. With a market cap of $19.3 billion, MAA not only manages its properties but also handles third-party property management, development, and construction through its service corporation.
Over the past year, MAA has been a standout performer among residential REITs. The company’s stock has surged by 35.2%, outpacing the broader S&P 500 Index ($SPX), which has increased by nearly 31.8% during the same period. Yet, in 2024, MAA’s stock rose only 22.9%, while the SPX gained 25.8% year-to-date.
Drilling down further, MAA’s benefits can be contrasted with the Residential REIT ETF (HAUS), which has risen approximately 35% over the last year. On a year-to-date basis, MAA has reported returns that surpass the ETF’s 22% gains over the same time period.
The company’s impressive performance is tied to its strategy of expanding its apartment portfolio. MAA has invested over $450 million in new properties that are already being leased, and nearly $1 billion is allocated for future developments. Such investments position MAA for sustained growth in rental income. Additionally, the company’s recent acquisitions showcase its financial flexibility, setting the stage for ongoing expansion opportunities and potential dividend increases.
On October 30, MAA’s shares experienced a slight increase following the announcement of its Q3 results. Funds from Operations (FFO) reached $2.21, exceeding Wall Street’s expectations of $2.18. The company also reported revenue of $551.1 million, surpassing forecasts of $549.4 million. For Q4, MAA projects its FFO will be between $2.15 and $2.31, while its full-year FFO is expected to be between $8.80 and $8.96.
Looking ahead to the current fiscal year ending in December, analysts are predicting a 3.2% decline in MAA’s FFO to $8.88 on a diluted basis. The company has a mixed history regarding earnings surprises, having exceeded consensus estimates in three out of the last four quarters while falling short in one instance.
Among 25 analysts who cover MAA, there is a consensus recommendation of “Moderate Buy.” This includes nine “Strong Buy” ratings, one “Moderate Buy,” 12 “Holds,” and three “Strong Sells.”
This recommendation is more optimistic compared to three months ago when only seven analysts issued a “Strong Buy,” and two were advising a “Strong Sell.”
On November 14, Scotiabank analyst Nicholas Yulico retained a “Sector Perform” rating but reduced the price target on MAA to $173, suggesting a possible upside of 4.7% from current trading levels. Although MAA’s stock currently stands above its average price target of $163.30, the highest price target of $187 indicates an upside potential of 13.2%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
