Invitation Homes

Methodology

This EPS-based method has fundamental limitations for Invitation Homes as a single-family rental REIT, since depreciation distorts earnings despite homes potentially appreciating. The company's portfolio of rental houses generates predictable cash flows from residential leases. Investors should use FFO or AFFO-based models that better capture rental economics and property value trends.

Methodology

Traditional PEG analysis is problematic for Invitation Homes given GAAP depreciation that doesn't reflect economic reality of residential real estate. If using PEG, substitute FFO or AFFO growth for EPS growth. Even then, single-family rental REITs depend more on rental rate growth, occupancy trends, and property appreciation than earnings-based growth multiples.

Methodology

Invitation Homes pays a meaningful dividend representing an important component of total return for a residential REIT. The company balances current income with investments in property improvements and selective acquisitions. PEGY provides context, though for single-family rental REITs, rent growth prospects, occupancy rates, and home price appreciation matter more than dividend-adjusted earnings metrics.