What is UDR Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, UDR's Probability of Financial Distress (%) is 0.03%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of UDR's Probability of Financial Distress (%)
For the REIT - Residential subindustry, UDR's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
UDR's Probability of Financial Distress (%) Distribution in the REITs Industry
For the REITs industry and Real Estate sector, UDR's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where UDR's Probability of Financial Distress (%) falls into.
UDR Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | -8.02 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.03% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
UDR (UDR) Business Description
Traded in Other Exchanges
Address
1745 Shea Center Drive, Suite 200, Highlands Ranch, CO, USA, 80129
UDR is a real estate investment trust that owns, operates, acquires, renovates, develops, redevelops, disposes of, and manages multifamily apartment communities in targeted markets located in the United States. The company has two reportable segments; Same-Store Communities segment represents those communities acquired, developed, and stabilized prior to January 1, 2021, and held as of December 31, 2022, and Non-Mature Communities/Other segment represents those communities that do not meet the criteria to be included in Same-Store Communities, including, but not limited to, recently acquired, developed and redeveloped communities, and the non-apartment components of mixed-use properties. The company generates key revenue from Same-Store Communities.
Executives
| Thomas W Toomey |
director, officer: Chief Executive Officer |
|
| Patricia Sciutto Doerr |
officer: SVP-Chief ESG/People Officer |
1745 SHEA CENTER DRIVE, SUITE 200, HIGHLANDS RANCH CO 80129 |
| Kevin C Nickelberry |
director |
1745 SHEA CENTER DRIVE, SUITE 200, HIGHLANDS RANCH CO 80129 |
| Harry G Alcock |
officer: SVP-Asset Management |
4582 SOUTH ULSTER STREET PARKWAY, SUITE 1100, DENVER CO 80237 |
| Jerry A Davis |
officer: SVP-Chief Operating Officer |
1745 SHEA CENTER DRIVE, SUITE 200, HIGHLANDS RANCH CO 80129 |
| Clinton D Mcdonnough |
director |
1745 SHEA CENTER DRIVE, SUITE 200, HIGHLANDS RANCH CO 80129 |
| Tracy L Hofmeister |
officer: VP-Accounting |
1745 SHEA CENTER DRIVE, SUITE 200, HIGHLANDS RANCH CO 80129 |
| Joseph D Fisher |
officer: SVP-Chief Financial Officer |
1745 SHEA CENTER DRIVE, SUITE 200, HIGHLANDS RANCH CO 80129 |
| Diane M Morefield |
director |
200 W. MADISON STREET, SUITE 1700, CHICAGO IL 60606 |
| Michael D Lacy |
officer: SVP-Property Operations |
1745 SHEA CENTER DRIVE, SUITE 200, HIGHLANDS RANCH CO 80129 |
| Matthew A Cozad |
officer: SVP-Corp Serv and Innovation |
1745 SHEA CENTER DRIVE, SUITE 200, HIGHLANDS RANCH CO 80129 |
| Warren L Troupe |
officer: Sr Exec VP & General Counsel |
1745 SHEA CENTER DRIVE, SUITE 200, HIGHLANDS RANCH CO 80129 |
| James D Klingbeil |
director |
|
| Lynne B Sagalyn |
director |
|
| Jon A Grove |
director |
|
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