AGNCP
AGNC Investment Corp.
$25.09
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 75.9% below fair value
You pay
$25.15
Bear
$85.92
Fair
$104.34
Bull
$122.75
Bear
$85.92
+241.6%
$4.72 FFO × 18x
Fair
$104.34
+314.9%
$4.72 FFO × 22x
Bull
$122.75
+388.1%
$4.72 FFO × 26x
Key Value Driver
FFO/share ($4.72) × default P/FFO multiple
Implied Market Multiple
5.3x
Summary
At $4.72 FFO/share with a 22x default REIT multiple, the base-case value is $104.34 per share. Dividend yield: 9.1%.
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 9.1% is unusually high — make sure the company generates enough cash to keep paying it.
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