UDR 41.85 (-0.43%)
US9026531049REITsREIT - Residential

Last update on 2024-06-06

UDR (UDR) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Discover the 2023 Piotroski F-Score analysis of UDR, scoring 7/9, reflecting its financial health and investment potential. Explore in-depth insights and trends.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
Learn more...

Short Analysis - Piotroski Score: 7

We're running UDR (UDR) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
1
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
0
Current Ratio is growing?
1
Number of shares not diluted?
0
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

UDR (UDR) scored 7 out of 9 on the Piotroski F-Score, reflecting a strong financial position based on profitability, liquidity, and operating efficiency. The company showed positive net income, positive cash flow, and improved return on assets, signifying good profitability. While the operating cash flow exceeded net income, UDR's leverage saw a slight uptick, and the current ratio improved significantly. The increase in outstanding shares was a downside, but improvements in gross margin and asset turnover ratio highlighted better operational performance.

Insights for Value Investors Seeking Stable Income

With a Piotroski F-Score of 7, UDR (UDR) demonstrates strong financial health and operational efficiency. As an investor, it seems worth considering this stock for potential investment. The company shows positive profitability trends and good cash flows, which are crucial for long-term sustainability and growth. However, keep an eye on the leverage and outstanding shares to assess any future financial impacts. Overall, UDR appears to be a solid choice for investment with room for cautious optimism.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of UDR (UDR)

Company has a positive net income?

Net income is one of the crucial criteria in the Piotroski analysis as it provides an insight into a company's profitability over a given period. A positive net income indicates a company is generating profit, making it a great sign of financial health.

Historical Net Income of UDR (UDR)

The net income for UDR in 2023 stands at $444,353,000, a significant improvement compared to previous years. Historically, UDR has experienced fluctuations in net income, such as negative values in 2008 and 2009, and lower figures in recent years. This increase reflects a notable turnaround. Thus, for the criterion concerning net income, UDR earns 1 point for 2023, indicating a positive trend towards profitability.

Company has a positive cash flow?

Cash Flow from Operations (CFO) measures the cash generated by a company's regular business operations. Positive CFO indicates a company’s ability to generate sufficient cash to maintain operations and invest in growth, which is a crucial indicator of financial health.

Historical Operating Cash Flow of UDR (UDR)

UDR's Cash Flow from Operations (CFO) for 2023 stands at $832,664,000, which is positive. Historically, the company has shown a strong performance in generating positive CFO year by year. Over the last 20 years, the CFO has consistently been positive, indicating strong operational efficiency. In 2003, the CFO was $234,945,000 and has grown significantly over the decades, reaching the current $832,664,000 in 2023. This positive trend points out that UDR consistently generates enough cash from its business operations, which is excellent for its long-term sustainability and growth.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures the efficiency of a company in generating profit relative to its total assets. It is crucial to track changes in ROA to evaluate inherent company profitability trends and capital utilization.

Historical change in Return on Assets (ROA) of UDR (UDR)

UDR showed a significant improvement in its ROA, increasing from 0.008 in 2022 to 0.0397 in 2023. This substantial uptick signifies enhanced efficiency in utilizing assets to generate profits, yielding a more robust financial performance. Historically, UDR's ROA has mostly lagged behind the industry median, which has consistently been much higher (circa 0.5 in recent years). This recent improvement, however, demonstrates a positive momentum, even though UDR's ROA for 2023 (0.0397) remains notably below the industry median ROA of 0.5894, indicating that while progress is evident, there is still room for UDR to enhance its asset profitability further. Overall, the observed trend is beneficial and earns 1 point in the Piotroski Analysis.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income for UDR (UDR)

Historical accruals of UDR (UDR)

The operating cash flow (OCF) for UDR in 2023 stands at $832.664 million, surpassing the net income of $444.353 million for the same year. This aligns with Piotroski's positive criteria for financial health, awarding a point. Impressively, UDR's OCF has consistently remained higher than its net income over the last 20 years, other than in a few anomalous years (such as 2009 when net income was negative). This trend is a strong indicator of robust operational efficiency and effective cash management, consistent with high-quality earnings. Given this long-term pattern, it's a positive marker for the company's future financial stability.

Liquidity of UDR (UDR)

Leverage is declining?

Change in leverage compares the current debt level (in this case, the Leverage ratio) to its previous year's value. A decrease signifies an improvement in financial health.

Historical leverage of UDR (UDR)

The Leverage for UDR has increased from 0.4845 in 2022 to 0.4899 in 2023. This represents a marginal increase in leverage. Historically, UDR's leverage has fluctuated significantly, reaching as high as 0.6957 in 2005 and as low as 0.4429 in 2016. Given this context, an incremental rise of 0.0054 might signal caution about an emerging upward trend in leverage. However, considering the broad historical context, it neither represents an alarming spike nor a significant deviation from averages around 0.5 over the past decade.

Current Ratio is growing?

Explain the criterion for UDR (UDR) and why it is important to consider

Historical Current Ratio of UDR (UDR)

Assessing the change in the Current Ratio is crucial because it reflects a company's ability to pay off its short-term liabilities with its short-term assets. For UDR, a Current Ratio of 0.3106 in 2023 compared to 0.1129 in 2022 indicates a significant increase, suggesting an improvement in liquidity position. However, both values are below the industry median, implying there is room for further enhancement. Given the increase in Current Ratio, this criterion earns UDR 1 point.

Number of shares not diluted?

The change in shares outstanding criterion evaluates whether a company has reduced its outstanding shares compared to the previous year, in an effort to signify that stock repurchases are taking place. This reduction is crucial as it often boosts earnings per share, signaling a strong financial position and commitment to returning value to shareholders.

Historical outstanding shares of UDR (UDR)

Comparing the outstanding shares of 321,671,000 in 2022 with 328,765,000 in 2023, it is evident that the shares have increased in 2023. Consequently, this criterion will receive a score of 0 according to the Piotroski analysis framework. Historically, UDR's outstanding shares have generally exhibited an upward trend over the past two decades. Beginning in 2003 with 115,648,000 shares, the number has steadily risen to the current figure of 328,765,000 in 2023. While such an increase can be indicative of growth and expansion, it might dilute existing shareholders' value if not accompanied by proportionate increases in earnings. In this case, it should be noted that from 2022 to 2023, shares outstanding grew by over 7 million shares, warranting careful evaluation of the underlying reasons for this issuance and its potential long-term impacts on shareholder value.

Operating of UDR (UDR)

Cross Margin is growing?

The change in Gross Margin criterion assesses the company's ability to convert revenue into profit. An increase in gross margin indicates improved efficiency in controlling the cost of goods sold, which can lead to higher profitability. It is essential for evaluating the company's financial health and operational performance.

Historical gross margin of UDR (UDR)

UDR's Gross Margin increased from 0.2182 in 2022 to 0.2412 in 2023, which represents a positive shift. This improvement translates to a gain of 1 point in the Piotroski Analysis. While the Gross Margin is still lower compared to the industry's median Gross Margin of 0.5894 in 2023, the upward trend is a constructive sign. Historical data shows that UDR's Gross Margin has been relatively volatile, peaking at 0.8334 in 2012, thus the recent increase could be an indicator of potential stabilization in profitability.

Asset Turnover Ratio is growing?

The Asset Turnover ratio compares a company’s sales to its asset base, indicating how efficiently the company is using its assets to generate revenue. A higher ratio denotes higher efficiency.

Historical asset turnover ratio of UDR (UDR)

Between 2022 and 2023, UDR’s Asset Turnover ratio increased from 0.1391 to 0.1452. This positive shift indicates improved efficiency in using their assets to generate revenue, reflecting favorably on management effectiveness. Historically, the company has fluctuated but shown an upward trend since 2008. The last 20 years show 2023 as a high point for UDR, adding 1 point under the Piotroski framework.


Obligatory risk notice

We would like to point out that the contents of this website are for general information purposes only and do not constitute recommendations for the purchase or sale of specific financial instruments, and therefore do not constitute investment advice. In particular, marketstorylabs.com and its creators cannot assess the extent to which information / recommendations made on the pages correspond to your investment objectives, your risk tolerance and your ability to bear losses. Therefore, if you make any investment decisions based on information on the site, you do so solely on your own responsibility and at your own risk. This in turn means that neither marketstorylabs.com nor its creators are liable for any losses incurred as a result of investment decisions based on the information on the marketstorylabs.com website or other media used.