MAA
Mid-America Apartment Communities, Inc.
$118.93
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Strong
·
Conviction
Undervalued
Trading 57.0% below fair value
You pay
$118.93
Bear
$234.18
Fair
$276.84
Bull
$319.50
Bear
$234.18
+96.9%
$9.19 FFO × 19x
Fair
$276.84
+132.8%
$9.19 FFO × 22x
Bull
$319.50
+168.6%
$9.19 FFO × 26x
Adjust Assumptions
22.4x
$
Key Value Driver
FFO/share ($9.19) × residential P/FFO multiple
Implied Market Multiple
12.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (37 analysts)
$137.64
Divergence from AlphaVal
101%
Summary
At $9.19 FFO/share with a 22x residential REIT multiple, the base-case value is $276.84 per share. Dividend yield: 5.1%. DDM cross-check: $443.38.
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 5.1% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $443.38 (60% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $137.64 (from 37 analysts). Our estimate is 101% 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