Multifamily Stocks Drop Slightly
During the month of February, the MFSI declined by slightly more than 18 points, its smallest monthly movement in well over three years.  Including this most recent decline, the MFSI is down by just over one-half-of-one-percent over the past three months. The February decline of exactly two-thirds-of-one-percent means that the MFSI has fallen in three of the past fourth months, and 11 of the past 16 months. But that still puts the MFSI in positive territory year-to-date for the second month in a row for the first time in over a year. With the latest fall, the MFSI finds itself at 1,080 points, or about 28% off its all-time high, reached in January 2007. During the past month, the value of the S&P 500 with dividends reinvested fell exactly three and-one-quarter percent and, as a result, finds itself down a bit more than three-and-a-half percent over the past 12 months, the first time it has been in negative territory for two straight months year-over-year since the middle of 2003.

Because the S&P 500 with dividends decreased by three and-one-quarter percent while the MFSI decreased by about one-fifth as much during the month of February, the performance gap--or percentage difference--between the two indexes increased from 115% last month to 121% in February--up sharply from the recent low of 92% set two months ago. Despite the very strong 80% rise in the S&P 500 since its recent cyclical low, set in October 2002, the MFSI has risen by a slightly stronger 94% during the same 65-month time period. In addition, the MFSI continues to dramatically outperform the S&P 500 over longer time periods, including the past five, six and seven years. Since December 1998, the MFSI has risen by a whopping 170% while the S&P 500 with dividends reinvested has gained a much smaller 26%.

During the month of February, the price-to-earnings ratio (P/E) of the MFSI weakened slightly and now stands at 14.07 while the dividend yield, defined as the total cash dividend payments divided by the current stock price, and which moves in the opposite direction, strengthened to 6.5%. The MFSI is an index of 19 publicly traded US headquartered firms, including 16 REITs, principally involved in multifamily ownership and management. [ return to top ]