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Strategies & Market Trends : Value Investing

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To: maverick61 who wrote (27042)6/8/2007 10:30:52 PM
From: Grommit  Read Replies (1) of 78462
 
REITs

I agree that MPW is now overpriced, but I still own some. Actually almost all reits are overpriced right now.

One simple thing to look at is Price/FFO. I used to do a lot of studying of Yield vs. Payout Ratio -- graphs and mathematical analysis. It has served me well. But then, silly me, I realized that when you get down to it, Payout Ratio / Yield is equal to Price / FFO.

1. Payout Ratio = Dividend / FFO
2. Yield = Dividend / Price
So Payout Ratio / Yield = Price / FFO.

So, among other things, look for a high yield and a nice low Price/FFO. Four particularly good REITs right now are FR HPT HRP SUI. I check around 80 reits every few months, looking for deals.

cheers,
grommit
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