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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' Q4 2025 Earnings: A Strong Finish to a Robust Year

Sun Communities, Inc. reported a strong fourth quarter and full-year 2025 results, with core FFO per share of $1.40 for the quarter and $6.68 for the full year, both above the high end of guidance ranges. The actual EPS came out at $0.99, significantly higher than the estimated $0.3913. North American same-property NOI growth was 7.9% for the quarter and 5.7% for the full year, driven by a 5.2% rental growth and occupancy gains in the manufactured housing segment. The company's financial performance was robust, with a clear focus on disciplined capital allocation and execution.

Publication Date: Mar -01

📋 Highlights
  • Core FFO Growth Exceeds Guidance: Core FFO per share was $1.40 (Q4) and $6.68 (full-year 2025), surpassing the high end of guidance ranges.
  • Strong Same-Property NOI Growth: North American same-property NOI grew 7.9% in Q4 and 5.7% annually, driven by MH (7.2% revenue growth) and RV segments.
  • Shareholder Returns and Capital Allocation: Returned $1.5B to shareholders in 2025, including $546M in share repurchases (4.3M shares at $125.62 avg.) and a 8% distribution increase.
  • Strategic Asset Transactions: Sold $200M in non-strategic assets, acquired 14 MH/RV communities ($457M) via 1031 exchanges, and $387M spent on UK property title purchases.
  • 2026 Guidance and Leverage Targets: Full-year core FFO guidance set at $6.83–$7.03 ($6.93 midpoint), with leverage targeting 3.5x–4.5x net debt/EBITDA (current 3.4x).

Capital Allocation and Shareholder Returns

The company returned over $1.5 billion of capital to shareholders in 2025, including a share repurchase of 4,300,000 shares at an average price of $125.62 per share. The Board approved an approximate 8%, or $0.08 per share, increase to the quarterly distribution rate. This demonstrates the company's commitment to shareholder returns and its confidence in its ability to generate strong cash flows.

Operational Highlights and Guidance

In 2025, the company executed on its simplification strategy, selling over $200 million of non-strategic assets and land parcels, and deploying 1031 exchange proceeds to acquire 14 manufactured housing and annual RV communities totaling $457 million. For 2026, the company established full-year core FFO per share guidance at a midpoint of $6.93 with a range of $6.83 to $7.03. North American same-property NOI growth is expected to be approximately 4.5%, with manufactured housing growing by 5.9% and RV growing by 0.9%.

Valuation and Growth Prospects

With a P/E Ratio of 12.29 and an EV/EBITDA of 25.54, the market appears to be pricing in a moderate growth trajectory for Sun Communities. Analysts estimate next year's revenue growth at 4.2%, which is slightly below the company's historical performance. However, the company's focus on disciplined capital allocation and execution is expected to drive sustainable long-term growth. Charles Young stated that he is "past his listening and learning tour and is now focused on executing the company's core pillars," which suggests a renewed focus on operational excellence.

Segment Performance and Outlook

The manufactured housing segment continues to perform well, with MH same-store revenue growth of 7.2% in 2025 driven by rental growth and occupancy gains. The RV segment is expected to see a 1.5% decline in transient revenue year over year, but with a 4% rental increase for annual guests and 600 transient conversions to annual contracts. The UK operation is a high-quality business with a best-in-class portfolio, and the company is evaluating the business to determine how best to create long-term shareholder value.

3. NewsRoom

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ArrowMark Colorado Holdings LLC Boosts Holdings in Sun Communities, Inc. $SUI

Mar -16

Source: defenseworld.net

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First Trust Advisors LP Has $39.47 Million Holdings in Sun Communities, Inc. $SUI

Mar -13

Source: defenseworld.net

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Sun Communities, Inc. Declares First Quarter 2026 Distribution

Mar -12

Source: globenewswire.com

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Capital International Investors Purchases 4,768 Shares of Sun Communities, Inc. $SUI

Mar -12

Source: defenseworld.net

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Sun Communities, Inc. (SUI) Presents at Citi's Miami Global Property CEO Conference 2026 Transcript

Mar -02

Source: seekingalpha.com

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Sun Communities, Inc. $SUI Shares Sold by APG Asset Management US Inc.

Mar -01

Source: defenseworld.net

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SUI Group Holdings Limited (SUIG) Q4 2025 Earnings Call Transcript

Feb -27

Source: seekingalpha.com

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SUI Group Reports Fourth Quarter 2025 Financial and Operating Results

Feb -26

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: 6.3/10

Value: 3.3

Growth: 4.7

Quality: 6.7

Yield: 8.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Mid-America Apartment Communities

A-Score: 5.6/10

Value: 2.8

Growth: 5.2

Quality: 5.5

Yield: 7.0

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Equity Lifestyle Properties

A-Score: 5.4/10

Value: 2.1

Growth: 5.2

Quality: 6.2

Yield: 5.0

Momentum: 4.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Independence Realty Trust

A-Score: 5.4/10

Value: 2.8

Growth: 5.8

Quality: 4.6

Yield: 7.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
UDR

A-Score: 5.1/10

Value: 2.3

Growth: 3.9

Quality: 4.4

Yield: 8.0

Momentum: 2.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Apartment Income REIT

A-Score: 4.6/10

Value: 4.4

Growth: 4.3

Quality: 5.4

Yield: 4.0

Momentum: 6.0

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

135.27$

Current Price

135.27$

Potential

-0.00%

Expected Cash-Flows