OLP
One Liberty Properties, Inc.
$21.96
Real Estate Investment Trust
85%
P/FFO × Diversified REIT Multiple
Strong
·
Conviction
Undervalued
Trading 53.7% below fair value
You pay
$21.96
Bear
$39.31
Fair
$47.41
Bull
$55.51
Bear
$39.31
+79.0%
$2.41 FFO × 18x
Fair
$47.41
+115.9%
$2.41 FFO × 22x
Bull
$55.51
+152.8%
$2.41 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($2.41) × diversified P/FFO multiple
Implied Market Multiple
9.1x
Summary
At $2.41 FFO/share with a 22x diversified REIT multiple, the base-case value is $47.41 per share. Dividend yield: 8.2%. DDM cross-check: $33.55.
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 8.2% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $33.55 (29% 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