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1. Company Snapshot

1.a. Company Description

Sun Communities, Inc.is a REIT that, as of March 31, 2022, owned, operated, or had an interest in a portfolio of 603 developed MH, RV and marina properties comprising nearly 159,300 developed sites and over 45,700 wet slips and dry storage spaces in 39 states, Canada, Puerto Rico and the UK.

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1.b. Last Insights on SUI

Sun Communities' recent performance was positively driven by its Q2 2025 earnings beat, with high occupancy rates and quality assets in manufactured housing and RV segments. The company's sale of Safe Harbor assets streamlined its operations, lowered leverage, and created a potential valuation gap. Additionally, Sun Communities' CEO transition and operational restructuring aimed to boost efficiency, with cost savings and a sharpened focus on core assets. The company raised its FY2025 FFO guidance, citing strong performance and a stable dividend yield. (Source: Sun Communities: A Bright Future For This Transformed REIT)

1.c. Company Highlights

2. Sun Communities Beats Q3 Expectations with Strong Operational Performance

Sun Communities reported core FFO per share of $2.28, exceeding the high end of their guidance range and surpassing analyst estimates of $2.18. The strong performance was driven by a 5.4% increase in North American same-property NOI, led by manufactured housing, which delivered 10.1% NOI growth. Revenue growth was robust, with same-property NOI growth in the U.K. also contributing to the overall performance. As John McLaren noted, "I'm very pleased with our third quarter results... driven by strong same-property performance in North America and the U.K."

Publication Date: Nov -03

📋 Highlights
  • Strong Core FFO Performance:: Reported core FFO per share of $2.28, exceeding high-end guidance by surpassing $2.25.
  • North American NOI Growth:: Same-property NOI increased 5.4%, driven by 10.1% growth in manufactured housing with 98% occupancy.
  • Capital Deployment Activity:: Acquired 14 communities ($457M) and 28 U.K. ground leases ($324M) since April, with cap rates/yields in low 4% range.
  • Guidance Upside:: Raised core FFO per share guidance to $6.59–$6.67 and North American same-property NOI growth to 5.1% midpoint.
  • RV Segment Momentum:: Achieved 700 net RV conversions in 2025; raised 2026 RV annual renewal guidance to 4% growth with improved retention.

Operational Highlights

The company's operational performance was a key driver of the strong quarterly results. Manufactured housing delivered 10.1% NOI growth, maintaining a solid 98% occupancy. The RV segment also showed improvement, with a focus on retention leading to good net conversion results, with almost 700 net RV conversions so far this year. The U.K. business also performed well, with same-property NOI growing by 5.4% in the quarter.

Capital Deployment and Balance Sheet

Sun Communities continued to demonstrate disciplined capital deployment, acquiring 14 communities for approximately $457 million using 1031 exchange proceeds. The company also purchased titles to 7 properties previously held under long-term ground leases for approximately $124 million. The balance sheet remains strong, with over $3 billion of debt paid down since the Safe Harbor sale, reducing leverage and improving financial flexibility.

Valuation and Outlook

With a P/E Ratio of 15.41 and a Dividend Yield of 6.29%, Sun Communities appears to be reasonably valued. The company's guidance for 2026, including a 4% RV annual increase, suggests continued growth. Analysts estimate next year's revenue growth at 4.0%. As Charles Young noted, "I expect this balanced approach to continue, and we'll review the framework with the Board and evaluate options for long-term shareholder value." The EV/EBITDA ratio of 55.26 suggests that the company's valuation is largely dependent on its ability to maintain its current level of profitability.

Growth Prospects

The company's focus on retention and growth in the RV segment, as well as its disciplined approach to acquisitions, positions it for long-term success. The rental home business within MH communities is also expected to drive traffic and growth. With a strong balance sheet and a commitment to creating long-term value, Sun Communities is well-positioned for continued growth and success.

3. NewsRoom

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Halper Sadeh LLC Encourages Sun Communities, Inc. Shareholders to Contact the Firm to Discuss Their Rights

Dec -04

Source: businesswire.com

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Sun Communities, Inc. (NYSE:SUI) Receives Average Rating of “Hold” from Analysts

Dec -04

Source: defenseworld.net

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SUI Group Holdings Limited (SUIG) Q3 2025 Earnings Call Transcript

Nov -14

Source: seekingalpha.com

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SUI Group Reports Third Quarter 2025 Results

Nov -12

Source: businesswire.com

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Sun Communities: Fairly Valued, Flat Dividends

Nov -12

Source: seekingalpha.com

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SUI Group Partners with Bluefin to Accelerate Institutional Adoption of Perpetual Futures and On-Chain Structured Products

Nov -10

Source: businesswire.com

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Sun Communities, Inc. (SUI) Q3 2025 Earnings Call Transcript

Oct -30

Source: seekingalpha.com

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SUI Group Schedules Third Quarter 2025 Conference Call for November 13, 2025 at 8:00 a.m. ET

Oct -30

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.75%)

6. Segments

Manufactured Home

Expected Growth: 3.5%

Sun Communities, Inc.'s manufactured home segment growth of 3.5% is driven by increasing demand for affordable housing, rising rental rates, and strategic acquisitions. Additionally, the company's focus on upgrading and expanding its communities, as well as its efforts to improve operational efficiency, contribute to its growth momentum.

Marina

Expected Growth: 3.8%

Marina segment's 3.8% growth at Sun Communities, Inc. is driven by increasing demand for luxury outdoor recreation, strategic acquisitions, and expansion of amenities and services. Additionally, the company's focus on premium customer experience, operational efficiencies, and favorable demographic trends in the RV and marina industries contribute to its growth momentum.

Recreational Vehicle

Expected Growth: 4.2%

Sun Communities' 4.2% growth in Recreational Vehicles is driven by increasing demand for outdoor recreation, baby boomers' desire for experiential travel, and millennials' preference for unique experiences. Additionally, the company's strategic acquisitions, expansion of amenities, and investments in digital platforms have enhanced the customer experience, contributing to the segment's growth.

7. Detailed Products

Manufactured Housing

Sun Communities offers a range of manufactured housing options, including single-wide and multi-wide homes, in various sizes and floor plans.

Recreational Vehicle (RV) Sites

Sun Communities operates RV parks and campgrounds, offering a range of amenities and services for RV enthusiasts, including full-hookup sites, Wi-Fi, and recreational activities.

Marina and Marina-Based RV Sites

Sun Communities owns and operates marinas, offering boat slips, storage, and RV sites with waterfront access, as well as amenities like fuel docks and boat lifts.

Home Sales and Brokerage Services

Sun Communities offers home sales and brokerage services, connecting buyers and sellers of manufactured homes and RVs.

Property Management Services

Sun Communities provides property management services, including community operations, maintenance, and customer service, for manufactured housing communities and RV parks.

8. Sun Communities, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is low for Sun Communities, Inc. as the company operates in a niche market of manufactured housing and recreational vehicle communities, making it difficult for substitutes to emerge.

Bargaining Power Of Customers

The bargaining power of customers is medium for Sun Communities, Inc. as the company has a diverse customer base, but some customers may have negotiating power due to their size or loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low for Sun Communities, Inc. as the company has a diverse supplier base and is not heavily dependent on a single supplier.

Threat Of New Entrants

The threat of new entrants is low for Sun Communities, Inc. as the company operates in a capital-intensive industry with high barriers to entry, making it difficult for new entrants to enter the market.

Intensity Of Rivalry

The intensity of rivalry is medium for Sun Communities, Inc. as the company operates in a competitive industry, but has a strong market position and brand recognition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 52.40%
Debt Cost 4.50%
Equity Weight 47.60%
Equity Cost 8.09%
WACC 6.21%
Leverage 110.07%

11. Quality Control: Sun Communities, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Sun Communities

A-Score: 6.0/10

Value: 2.7

Growth: 4.7

Quality: 6.4

Yield: 8.0

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Mid-America Apartment Communities

A-Score: 5.6/10

Value: 3.2

Growth: 5.2

Quality: 5.4

Yield: 7.0

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Equity Lifestyle Properties

A-Score: 5.3/10

Value: 2.0

Growth: 5.3

Quality: 6.2

Yield: 5.0

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Independence Realty Trust

A-Score: 5.2/10

Value: 2.6

Growth: 5.8

Quality: 4.2

Yield: 7.0

Momentum: 2.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
UDR

A-Score: 5.2/10

Value: 2.2

Growth: 3.9

Quality: 4.5

Yield: 8.0

Momentum: 2.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Apartment Income REIT

A-Score: 4.4/10

Value: 4.4

Growth: 4.3

Quality: 5.4

Yield: 4.0

Momentum: 5.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

128.23$

Current Price

128.23$

Potential

-0.00%

Expected Cash-Flows