As of May 22, 2025, Flagship Communities Real Estate Investment Trust's estimated intrinsic value ranges from $3.29 to $72.72 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $37.52 | +106.2% |
| Discounted Cash Flow (5Y) | $22.85 | +25.6% |
| Dividend Discount Model (Multi-Stage) | $65.46 | +259.9% |
| Dividend Discount Model (Stable) | $72.72 | +299.8% |
| Earnings Power Value | $3.29 | -81.9% |
Is Flagship Communities Real Estate Investment Trust (MHC.U.TO) undervalued or overvalued?
With the current market price at $18.19, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Flagship Communities Real Estate Investment Trust'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 | 3.2% | 3.7% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.71 | 0.83 |
| Cost of equity | 6.4% | 8.8% |
| Cost of debt | 4.0% | 6.3% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 0.93 | 0.93 |
| After-tax WACC | 4.8% | 6.8% |
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 | $23 | $990M | 84.4% |
| 10-Year Growth | $38 | $1,359M | 74.0% |
| 5-Year EBITDA | $41 | $1,457M | 89.4% |
| 10-Year EBITDA | $60 | $1,919M | 81.6% |
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 | $28M |
| Discount Rate (WACC) | 6.8% - 4.8% |
| Enterprise Value | $410M - $586M |
| Net Debt | $416M |
| Equity Value | $(5)M - $171M |
| Outstanding Shares | 25M |
| Fair Value | $(0) - $7 |
| Selected Fair Value | $3.29 |
| Metric | Value |
|---|---|
| Market Capitalization | $458M |
| Enterprise Value | $873M |
| Trailing P/E | 4.42 |
| Forward P/E | 5.29 |
| Trailing EV/EBITDA | 19.30 |
| Current Dividend Yield | 310.48% |
| Dividend Growth Rate (5Y) | 95.78% |
| Debt-to-Equity Ratio | 0.93 |
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% | $11.26 |
| Discounted Cash Flow (5Y) | 25% | $5.71 |
| Dividend Discount Model (Multi-Stage) | 20% | $13.09 |
| Dividend Discount Model (Stable) | 15% | $10.91 |
| Earnings Power Value | 10% | $0.33 |
| Weighted Average | 100% | $41.30 |
Based on our comprehensive valuation analysis, Flagship Communities Real Estate Investment Trust's weighted average intrinsic value is $41.30, which is approximately 127.0% above the current market price of $18.19.
Key investment considerations:
Given these factors, we believe Flagship Communities Real Estate Investment Trust is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.