Regency Centers

Methodology

This EPS-based method has fundamental limitations for Regency Centers as a REIT, since depreciation distorts reported earnings despite stable cash flows from grocery-anchored shopping centers. Investors should use FFO or AFFO-based models instead. The defensive nature of grocery-anchored retail with necessity-based tenants makes cash flow valuation straightforward.

Methodology

Traditional PEG analysis is problematic for Regency given GAAP depreciation distortions. If using PEG, substitute AFFO growth for EPS growth to get meaningful comparisons against retail REIT peers. Growth expectations should reflect same-property NOI growth, occupancy trends, and development pipeline contributions in suburban grocery-anchored centers.

Methodology

Regency offers a substantial dividend typical of equity REITs, with the yield central to the investment thesis for this defensive grocery-anchored retail landlord. Dividend growth reflects NOI expansion from high-quality suburban locations. For retail REITs, dividend sustainability and tenant quality matter as much as FFO growth.