Federal Realty Investment Trust

Methodology

Federal Realty is a REIT where EPS has limited meaning—FFO (Funds From Operations) is the proper earnings metric for retail real estate. Depreciation distorts GAAP earnings while FFO better reflects cash generation from high-quality shopping center rents. Investors should use FFO-based valuation methods rather than traditional P/E ratios for this retail REIT.

Methodology

PEG ratios based on EPS are inappropriate for Federal Realty—FFO growth is the relevant metric for REIT valuation. The premium shopping center REIT delivers low-single-digit FFO growth from rent increases and development. Retail REITs trade more on implied cap rates and dividend yields than earnings multiples given ongoing e-commerce structural challenges.

Methodology

Federal Realty pays a substantial dividend yielding 3-4% with over 50 years of consecutive increases, making total return analysis critical though PEGY using EPS is flawed for REITs. The dividend aristocrat status reflects quality retail assets in affluent markets. Investors should evaluate total return using FFO growth plus dividend yield rather than EPS-based metrics.