Yahoo Finance

• Core FFO per Share: $0.43, up 5.8% year-over-year.

• Net Income: $109.3 million, or $0.30 per diluted share.

• Same-Home Core Revenue Growth: 5.3%.

• Same-Home Core NOI Growth: 4.9%.

• Development Program Deliveries: 469 homes added to portfolios.

• Investment Cost: $171 million for 441 homes in wholly owned portfolio.

• Property Sales: 471 properties generating $145 million in net proceeds.

• Net Debt to Adjusted EBITDA: 5.3x.

• Cash and Credit Availability: $125 million in cash, $1.25 billion credit facility fully undrawn.

• 2024 Guidance: Maintained as previously provided.

• Warning! GuruFocus has detected 8 Warning Signs with AMH.

Release Date: May 03, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• American Homes 4 Rent reported a core FFO per share of $0.43, showing a 5.8% year-over-year growth.

• Demand for single-family rentals remains robust, supported by macro drivers such as national housing shortages and demographic trends.

• The company's Development Program continues to expand, aiming to deliver between 2,200 and 2,400 homes this year with high economic yields.

• Operational efficiency is highlighted by strong leasing momentum and occupancy rates, with same-home core revenue growth of 5.3%.

• American Homes 4 Rent is making significant strides in sustainability, with newly constructed homes being 54% more energy-efficient than typical American homes and the corporate headquarters receiving LEED Gold Certification.

Negative Points

• Core operating expense growth was reported at 5.9%, which could pressure net income if it continues to rise.

• The high-for-longer interest rate scenario might constrain new housing supply, potentially affecting future growth opportunities.

• Despite strong demand, the company noted the necessity of discounts to achieve desired yields from national builder acquisitions, indicating pricing pressures.

• The company's reliance on the Development Program for growth could pose risks if there are delays or increased costs in construction.

• While bad debt improved in March, there are ongoing concerns with local municipal and court system processing times, which could affect future collections.

Q & A Highlights

Q: Just wanted to ask about external growth and opportunities for portfolio acquisitions, if there's anything out there that would be of interest? And if so, where do you think yields are? And as a subset of that question, could you give us a sense of where your development yields are on a nominal basis pre-CapEx just so we can comp it apples-to-apples with where some of your peers are quoting cap rates at? A: (David P. Singelyn - CEO & Trustee) In the first quarter, we analyzed over 35,000 homes from national builders, with about 15,000 in our markets. The economic yields for desirable locations and quality were in the high 4s to low 5s. To make these deals work, we would need about a 15% decline in transaction price at current rent levels. For our development yields, they are in the high 5s on an economic basis, adding 10-20 basis points on a nominal NOI basis.