AGNC
AGNC Investment Corp.
$8.51
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 69.1% below fair value
You pay
$8.51
Bear
$22.78
Fair
$27.57
Bull
$32.37
Bear
$22.78
+167.6%
$1.61 FFO × 18x
Fair
$27.57
+223.9%
$1.61 FFO × 22x
Bull
$32.37
+280.3%
$1.61 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($1.61) × default P/FFO multiple
Implied Market Multiple
5.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (35 analysts)
$11.00
Divergence from AlphaVal
151%
Summary
At $1.61 FFO/share with a 22x default REIT multiple, the base-case value is $27.57 per share. Dividend yield: 5.6%. DDM cross-check: $8.95.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend yield of 5.6% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $8.95 (68% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $11.00 (from 35 analysts). Our estimate is 151% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify