Mid-America Apartment Communities

Methodology

This EPS-based method has fundamental limitations for Mid-America Apartments as a REIT, since depreciation distorts reported earnings despite stable cash flows from rent collections. Investors should use FFO or AFFO-based models instead, which better capture the economic reality of apartment operations. The predictable nature of rental income makes cash flow-based valuation straightforward.

Methodology

Traditional PEG analysis is problematic for Mid-America given GAAP depreciation distortions in reported EPS. If using PEG, substitute FFO or AFFO growth for EPS growth to get meaningful comparisons against multifamily REIT peers. Growth expectations should reflect occupancy trends, rent growth potential, and development pipeline contributions in target Sunbelt markets.

Methodology

Mid-America offers substantial dividends typical of equity REITs, which must distribute most taxable income. The dividend represents core FFO generation from the apartment portfolio. For REITs, combine dividend yield with FFO growth expectations rather than using traditional PEGY calculations based on distorted GAAP earnings.