UDR, Inc. ($UDR) is one of the largest apartment-focused real estate investment trusts in the United States. The company has over 50 years of operating history, 60,535 apartment homes across 21 markets, and an occupancy rate of 96.6%.

Despite its scale and consistency, UDR receives little attention from most investors. As a result, this is a fairly cheap stock with a high starting yield.

UDR is the fifth-largest apartment REIT by market capitalization, currently valued at approximately $12.7 billion. Its portfolio is well-diversified across the Northeast, West Coast, and Sunbelt regions, with net operating income split roughly 40%, 35%, and 25%, respectively. This balance limits overexposure to any single housing market or regional economy.

From an income perspective, UDR trades at roughly 14.8 times forward funds from operations and offers a 4.6% dividend yield. That yield is supported by a 5-year compound annual dividend growth rate of 3.6%. While this growth is anemic, it is better than several of UDR’s peers including Realty Income and AvalonBay Communities.

Over the long-term UDR has failed to beat the market.

Over the past 30 years, UDR has delivered an average annual total return of 8.7%. Since 2016, that figure has fallen to just 4.7% annually, less than a third of the S&P 500’s 15% annualized return over the same period.

Given the slow dividend growth rate and poor long-term performance, you may be wondering why anyone would cover this stock.

There are three reasons.

First, housing is always in demand. Many high-yield REIT sectors, such as malls or office buildings, are in declining industries. By contrast, rental housing is evergreen, especially in areas, like the East Coast, where property prices are high. UDR is also a reliable company that has paid 213 consecutive quarterly dividends. And, UDR has raised its dividend every year for 17 years.

Second, when interest rates were zero, or close to it, UDR stock was actually trading for approximately $60 per share. From December 2000 to December 2021, UDR actually beat the market with an average annual total return of 13.99%. If interest rates fall, a policy the Trump administration is vocally in favor of, bond rates will decline and Wall Street is likely to cycle back into REITs and other high-yield assets. If this happens, UDR’s valuation multiple could expand and the stock could retrace its previous highs.

Finally, UDR provides a straightforward way to collect rental income without the burden of being a landlord. You aren’t tied down to a specific location, and your slice of UDR’s properties consistently generate income no matter where you are. If you want to collect rents from Boston while on the beach in Florida or Mexico, you can.

Would I buy UDR today?

Possibly. But only under the right conditions.

At the moment, many blue chips are seeing massive rebounds. Over the past month, stocks like Procter & Gamble, Clorox Company, and PepsiCo are up 13%, 17%, and 22% respectively. As someone who enjoys staying active in the market and buying stocks every month, I might pick up some UDR shares if no other opportunity presents itself.

At its current valuation, UDR isn’t a standout opportunity. But, it could be a decent income investment. The company is well diversified, has a long history of rewarding shareholders, and is relatively cheap while offering a 4.6% starting yield.

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_{Educational only. Not investment or tax advice.}

Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.