AGNCL
AGNC Investment Corp.
$25.07
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 70.2% below fair value
You pay
$25.07
Bear
$69.52
Fair
$84.07
Bull
$98.62
Bear
$69.52
+177.3%
$4.73 FFO × 18x
Fair
$84.07
+235.3%
$4.73 FFO × 22x
Bull
$98.62
+293.4%
$4.73 FFO × 26x
Key Value Driver
FFO/share ($4.73) × default P/FFO multiple
Implied Market Multiple
5.3x
Summary
At $4.73 FFO/share with a 22x default REIT multiple, the base-case value is $84.07 per share. Dividend yield: 7.7%. DDM cross-check: $36.11.
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 7.7% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $36.11 (57% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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