UHT
Universal Health Realty Income Trust
$42.30
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Moderate
·
Conviction
Fair Value
Trading 23.5% below fair value
You pay
$42.30
Bear
$43.94
Fair
$55.28
Bull
$66.62
Bear
$43.94
+3.9%
$3.35 FFO × 14x
Fair
$55.28
+30.7%
$3.35 FFO × 18x
Bull
$66.62
+57.5%
$3.35 FFO × 22x
Key Value Driver
FFO/share ($3.35) × healthcare P/FFO multiple
Implied Market Multiple
12.6x
Summary
At $3.35 FFO/share with a 18x healthcare REIT multiple, the base-case value is $55.28 per share. Dividend yield: 7.0%. DDM cross-check: $43.61.
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 7.0% 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