Equity Lifestyle tops FFO estimates with 70% beat, raises dividend
22nd consecutive dividend increase highlights REIT's core portfolio strength despite revenue miss
Equity LifeStyle Properties delivered a stronger-than-expected fourth quarter, with normalized funds from operations surging 70% above analyst estimates even as revenue came in light, highlighting the REIT's ability to extract value from its portfolio of manufactured home communities and RV resorts.
The Chicago-based real estate investment trust reported normalized FFO of 79 cents per share for the quarter, handily beating the 46.5 cent consensus estimate, according to the company's earnings release. Revenue of $373.9 million fell short of the $389.4 million analysts had anticipated, a 4% shortfall.
The earnings strength underpinned Equity LifeStyle's 22nd consecutive annual dividend increase, with the board approving a 5.3% hike to $2.17 per share. The streak of dividend growth, now spanning more than two decades, positions the REIT among the most consistent income generators in the real estate sector, particularly within the manufactured housing and recreational vehicle niche.
"Core portfolio income grew 4.8% year-over-year, exceeding our long-term average," the company said in its earnings announcement, pointing to operational improvements across its nearly 400 properties spanning more than 100,000 residential sites nationwide.
Looking ahead, management issued 2026 FFO guidance of $3.12 to $3.22 per share, implying modest growth from 2025's $3.08. The conservative outlook reflects what executives described as ongoing normalization in certain markets, though the company remains focused on strategic acquisitions and operational efficiency to drive incremental growth.
The mixed results come as Equity LifeStyle trades at a premium valuation, with shares currently priced at $62.15 and carrying a trailing price-to-earnings ratio of 31.43 times. The company's $12.8 billion market capitalization reflects investor confidence in its business model, which benefits from relatively stable demand for affordable housing alternatives even as broader real estate markets face volatility.
Analysts remain largely positive on the stock, with 13 of 17 covering analysts rating it a buy or strong buy and an average target price of $68.85, according to market data. The shares have been trading in a 52-week range between $57.17 and $68.06, suggesting limited downside from current levels if operational momentum continues.
Equity LifeStyle's performance underscores a broader theme in the manufactured housing REIT sector, where operators have demonstrated resilience despite economic uncertainty. The company's focus on owning rather than just managing properties provides stable cash flows, while the essential nature of affordable housing creates a defensive characteristic that appeals to income-focused investors.
The dividend increase to $2.17 per share represents a forward yield of approximately 3.5% at current trading levels, making Equity LifeStyle competitive with other income-focused REITs while offering potential for capital appreciation as operational improvements translate to FFO growth. The company's next dividend payment is scheduled for January 9, 2026, for shareholders of record as of December 26.