MRP
Millrose Properties, Inc.
$27.63
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Strong
·
Conviction
Undervalued
Trading 43.8% below fair value
You pay
$27.63
Bear
$41.51
Fair
$49.14
Bull
$56.77
Bear
$41.51
+50.2%
$2.46 FFO × 16x
Fair
$49.14
+77.8%
$2.46 FFO × 19x
Bull
$56.77
+105.5%
$2.46 FFO × 22x
Key Value Driver
FFO/share ($2.46) × residential P/FFO multiple
Implied Market Multiple
11.2x
Summary
At $2.46 FFO/share with a 19x residential REIT multiple, the base-case value is $49.14 per share. Dividend yield: 10.6%. DDM cross-check: $54.60.
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 10.6% 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