BFS
Saul Centers, Inc.
$33.27
Real Estate Investment Trust
85%
P/FFO × Retail REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 35.3% below fair value
You pay
$33.27
Bear
$41.66
Fair
$51.44
Bull
$61.21
Bear
$41.66
+25.2%
$3.93 FFO × 12x
Fair
$51.44
+54.6%
$3.93 FFO × 15x
Bull
$61.21
+84.0%
$3.93 FFO × 18x
Adjust Assumptions
15.0x
$
Key Value Driver
FFO/share ($3.93) × retail P/FFO multiple
Implied Market Multiple
8.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$43.50
Divergence from AlphaVal
18%
Summary
At $3.93 FFO/share with a 15x retail REIT multiple, the base-case value is $51.44 per share. Dividend yield: 7.1%. DDM cross-check: $34.05.
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 7.1% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $34.05 (34% 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