Assessing Quality Of REIT Earnings

pepifoto REITs overwhelmingly trade on Adjusted Funds From Operations or AFFO. REITs with strong AFFO/share growth over the past 5 years tend to trade at high multiples and those with low or negative AFFO/share growth trade at low multiples. While higher AFFO is of course better, our analysis suggests the market is too focused on the raw numbers and is missing the underlying quality. AFFO comes from 18 buckets, each of which has decidedly different implications for the quality of earnings. This article will ...