As of May 25, 2025, Mid-America Apartment Communities Inc's estimated intrinsic value ranges from $89.52 to $203.34 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $203.34 | +33.1% |
| Discounted Cash Flow (5Y) | $170.52 | +11.6% |
| Dividend Discount Model (Multi-Stage) | $137.06 | -10.3% |
| Dividend Discount Model (Stable) | $130.52 | -14.6% |
| Earnings Power Value | $89.52 | -41.4% |
Is Mid-America Apartment Communities Inc (MAA) undervalued or overvalued?
With the current market price at $152.76, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Mid-America Apartment Communities Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.59 | 0.7 |
| Cost of equity | 6.6% | 8.8% |
| Cost of debt | 4.0% | 5.3% |
| Tax rate | 1.0% | 1.1% |
| Debt/Equity ratio | 0.28 | 0.28 |
| After-tax WACC | 6.0% | 8.0% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $171 | $24,920M | 85.1% |
| 10-Year Growth | $203 | $28,757M | 73.2% |
| 5-Year EBITDA | $205 | $28,902M | 87.1% |
| 10-Year EBITDA | $234 | $32,345M | 76.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $1,064M |
| Discount Rate (WACC) | 8.0% - 6.0% |
| Enterprise Value | $13,250M - $17,653M |
| Net Debt | $4,986M |
| Equity Value | $8,263M - $12,667M |
| Outstanding Shares | 117M |
| Fair Value | $71 - $108 |
| Selected Fair Value | $89.52 |
| Metric | Value |
|---|---|
| Market Capitalization | $17858M |
| Enterprise Value | $22844M |
| Trailing P/E | 31.58 |
| Forward P/E | 30.27 |
| Trailing EV/EBITDA | 18.05 |
| Current Dividend Yield | 389.82% |
| Dividend Growth Rate (5Y) | 10.63% |
| Debt-to-Equity Ratio | 0.28 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $61.00 |
| Discounted Cash Flow (5Y) | 25% | $42.63 |
| Dividend Discount Model (Multi-Stage) | 20% | $27.41 |
| Dividend Discount Model (Stable) | 15% | $19.58 |
| Earnings Power Value | 10% | $8.95 |
| Weighted Average | 100% | $159.58 |
Based on our comprehensive valuation analysis, Mid-America Apartment Communities Inc's weighted average intrinsic value is $159.58, which is approximately 4.5% above the current market price of $152.76.
Key investment considerations:
Given these factors, we believe Mid-America Apartment Communities Inc is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.