Intrinsic value of Mid-America Apartment Communities - MAA

Previous Close

$101.19

  Intrinsic Value

$14.12

stock screener

  Rating & Target

str. sell

-86%

  Value-price divergence*

+123%

Previous close

$101.19

 
Intrinsic value

$14.12

 
Up/down potential

-86%

 
Rating

str. sell

 
Value-price divergence*

+123%

Our model is not good at valuating stocks of financial companies, such as MAA.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of MAA stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 11.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  7.86
  40.90
  37.31
  34.08
  31.17
  28.55
  26.20
  24.08
  22.17
  20.45
  18.91
  17.52
  16.27
  15.14
  14.13
  13.21
  12.39
  11.65
  10.99
  10.39
  9.85
  9.36
  8.93
  8.54
  8.18
  7.86
  7.58
  7.32
  7.09
  6.88
  6.69
Revenue, $m
  1,125
  1,585
  2,177
  2,918
  3,828
  4,921
  6,210
  7,706
  9,414
  11,339
  13,483
  15,845
  18,423
  21,212
  24,208
  27,407
  30,803
  34,392
  38,171
  42,136
  46,286
  50,621
  55,140
  59,847
  64,743
  69,835
  75,126
  80,625
  86,339
  92,279
  98,453
Variable operating expenses, $m
 
  1,152
  1,582
  2,121
  2,783
  3,577
  4,514
  5,601
  6,843
  8,243
  9,801
  11,518
  13,392
  15,419
  17,597
  19,922
  22,391
  25,000
  27,747
  30,629
  33,646
  36,797
  40,082
  43,503
  47,063
  50,764
  54,610
  58,607
  62,761
  67,078
  71,566
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  853
  1,152
  1,582
  2,121
  2,783
  3,577
  4,514
  5,601
  6,843
  8,243
  9,801
  11,518
  13,392
  15,419
  17,597
  19,922
  22,391
  25,000
  27,747
  30,629
  33,646
  36,797
  40,082
  43,503
  47,063
  50,764
  54,610
  58,607
  62,761
  67,078
  71,566
Operating income, $m
  272
  433
  594
  797
  1,045
  1,344
  1,696
  2,104
  2,571
  3,097
  3,682
  4,327
  5,031
  5,793
  6,611
  7,484
  8,412
  9,392
  10,424
  11,507
  12,640
  13,824
  15,058
  16,344
  17,681
  19,071
  20,516
  22,018
  23,578
  25,200
  26,886
EBITDA, $m
  595
  888
  1,219
  1,634
  2,144
  2,756
  3,478
  4,315
  5,272
  6,351
  7,551
  8,874
  10,318
  11,880
  13,558
  15,349
  17,251
  19,261
  21,377
  23,598
  25,922
  28,350
  30,881
  33,517
  36,259
  39,110
  42,074
  45,153
  48,354
  51,680
  55,138
Interest expense (income), $m
  145
  167
  246
  347
  474
  630
  817
  1,038
  1,294
  1,587
  1,917
  2,284
  2,688
  3,130
  3,607
  4,121
  4,668
  5,250
  5,865
  6,512
  7,191
  7,902
  8,644
  9,418
  10,224
  11,063
  11,935
  12,841
  13,783
  14,762
  15,779
Earnings before tax, $m
  226
  266
  348
  450
  571
  714
  879
  1,066
  1,277
  1,510
  1,766
  2,043
  2,343
  2,663
  3,004
  3,364
  3,744
  4,142
  4,559
  4,995
  5,449
  5,922
  6,414
  6,925
  7,456
  8,008
  8,581
  9,177
  9,795
  10,439
  11,108
Tax expense, $m
  2
  72
  94
  121
  154
  193
  237
  288
  345
  408
  477
  552
  633
  719
  811
  908
  1,011
  1,118
  1,231
  1,349
  1,471
  1,599
  1,732
  1,870
  2,013
  2,162
  2,317
  2,478
  2,645
  2,818
  2,999
Net income, $m
  212
  194
  254
  328
  417
  521
  641
  778
  932
  1,102
  1,289
  1,492
  1,710
  1,944
  2,193
  2,456
  2,733
  3,024
  3,328
  3,646
  3,978
  4,323
  4,682
  5,055
  5,443
  5,846
  6,264
  6,699
  7,151
  7,620
  8,109

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  34
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  11,604
  16,341
  22,439
  30,085
  39,463
  50,732
  64,023
  79,438
  97,051
  116,901
  139,005
  163,355
  189,927
  218,680
  249,569
  282,544
  317,555
  354,558
  393,514
  434,394
  477,179
  521,865
  568,458
  616,978
  667,458
  719,944
  774,496
  831,186
  890,097
  951,325
  1,014,977
Adjusted assets (=assets-cash), $m
  11,570
  16,341
  22,439
  30,085
  39,463
  50,732
  64,023
  79,438
  97,051
  116,901
  139,005
  163,355
  189,927
  218,680
  249,569
  282,544
  317,555
  354,558
  393,514
  434,394
  477,179
  521,865
  568,458
  616,978
  667,458
  719,944
  774,496
  831,186
  890,097
  951,325
  1,014,977
Revenue / Adjusted assets
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
  0.097
Average production assets, $m
  9,007
  12,691
  17,425
  23,364
  30,646
  39,397
  49,719
  61,690
  75,368
  90,783
  107,949
  126,859
  147,494
  169,823
  193,811
  219,419
  246,608
  275,343
  305,596
  337,342
  370,569
  405,271
  441,454
  479,134
  518,336
  559,096
  601,460
  645,484
  691,233
  738,782
  788,213
Working capital, $m
  0
  -48
  -65
  -88
  -115
  -148
  -186
  -231
  -282
  -340
  -405
  -475
  -553
  -636
  -726
  -822
  -924
  -1,032
  -1,145
  -1,264
  -1,389
  -1,519
  -1,654
  -1,795
  -1,942
  -2,095
  -2,254
  -2,419
  -2,590
  -2,768
  -2,954
Total debt, $m
  4,500
  6,647
  9,385
  12,818
  17,029
  22,088
  28,056
  34,978
  42,886
  51,799
  61,723
  72,657
  84,587
  97,497
  111,367
  126,172
  141,892
  158,507
  175,998
  194,353
  213,564
  233,628
  254,548
  276,333
  298,999
  322,565
  347,059
  372,512
  398,963
  426,455
  455,035
Total liabilities, $m
  5,191
  7,337
  10,075
  13,508
  17,719
  22,778
  28,746
  35,668
  43,576
  52,489
  62,413
  73,347
  85,277
  98,187
  112,057
  126,862
  142,582
  159,197
  176,688
  195,043
  214,254
  234,318
  255,238
  277,023
  299,689
  323,255
  347,749
  373,202
  399,653
  427,145
  455,725
Total equity, $m
  6,414
  9,004
  12,364
  16,577
  21,744
  27,953
  35,276
  43,771
  53,475
  64,412
  76,592
  90,009
  104,650
  120,493
  137,513
  155,682
  174,973
  195,362
  216,826
  239,351
  262,926
  287,548
  313,221
  339,955
  367,769
  396,689
  426,747
  457,983
  490,443
  524,180
  559,253
Total liabilities and equity, $m
  11,605
  16,341
  22,439
  30,085
  39,463
  50,731
  64,022
  79,439
  97,051
  116,901
  139,005
  163,356
  189,927
  218,680
  249,570
  282,544
  317,555
  354,559
  393,514
  434,394
  477,180
  521,866
  568,459
  616,978
  667,458
  719,944
  774,496
  831,185
  890,096
  951,325
  1,014,978
Debt-to-equity ratio
  0.702
  0.740
  0.760
  0.770
  0.780
  0.790
  0.800
  0.800
  0.800
  0.800
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
Adjusted equity ratio
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551
  0.551

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  212
  194
  254
  328
  417
  521
  641
  778
  932
  1,102
  1,289
  1,492
  1,710
  1,944
  2,193
  2,456
  2,733
  3,024
  3,328
  3,646
  3,978
  4,323
  4,682
  5,055
  5,443
  5,846
  6,264
  6,699
  7,151
  7,620
  8,109
Depreciation, amort., depletion, $m
  323
  455
  625
  838
  1,099
  1,412
  1,782
  2,211
  2,701
  3,254
  3,869
  4,547
  5,287
  6,087
  6,947
  7,864
  8,839
  9,869
  10,953
  12,091
  13,282
  14,526
  15,823
  17,173
  18,578
  20,039
  21,558
  23,136
  24,775
  26,480
  28,251
Funds from operations, $m
  504
  649
  879
  1,166
  1,515
  1,933
  2,423
  2,989
  3,633
  4,356
  5,158
  6,039
  6,997
  8,031
  9,139
  10,320
  11,572
  12,893
  14,282
  15,737
  17,260
  18,849
  20,505
  22,229
  24,022
  25,885
  27,822
  29,835
  31,926
  34,100
  36,360
Change in working capital, $m
  20
  -14
  -18
  -22
  -27
  -33
  -39
  -45
  -51
  -58
  -64
  -71
  -77
  -84
  -90
  -96
  -102
  -108
  -113
  -119
  -125
  -130
  -136
  -141
  -147
  -153
  -159
  -165
  -171
  -178
  -185
Cash from operations, $m
  484
  663
  897
  1,188
  1,543
  1,966
  2,462
  3,034
  3,685
  4,414
  5,222
  6,109
  7,074
  8,115
  9,229
  10,416
  11,674
  13,000
  14,395
  15,856
  17,385
  18,979
  20,641
  22,370
  24,168
  26,038
  27,981
  30,000
  32,097
  34,278
  36,545
Maintenance CAPEX, $m
  0
  -323
  -455
  -625
  -837
  -1,098
  -1,412
  -1,782
  -2,211
  -2,701
  -3,254
  -3,869
  -4,547
  -5,287
  -6,087
  -6,947
  -7,864
  -8,839
  -9,869
  -10,953
  -12,091
  -13,282
  -14,526
  -15,823
  -17,173
  -18,578
  -20,039
  -21,558
  -23,136
  -24,775
  -26,480
New CAPEX, $m
  -523
  -3,684
  -4,735
  -5,938
  -7,283
  -8,751
  -10,322
  -11,972
  -13,677
  -15,416
  -17,166
  -18,910
  -20,635
  -22,329
  -23,988
  -25,608
  -27,189
  -28,736
  -30,252
  -31,747
  -33,227
  -34,702
  -36,183
  -37,680
  -39,202
  -40,760
  -42,364
  -44,024
  -45,749
  -47,549
  -49,431
Cash from investing activities, $m
  -710
  -4,007
  -5,190
  -6,563
  -8,120
  -9,849
  -11,734
  -13,754
  -15,888
  -18,117
  -20,420
  -22,779
  -25,182
  -27,616
  -30,075
  -32,555
  -35,053
  -37,575
  -40,121
  -42,700
  -45,318
  -47,984
  -50,709
  -53,503
  -56,375
  -59,338
  -62,403
  -65,582
  -68,885
  -72,324
  -75,911
Free cash flow, $m
  -226
  -3,343
  -4,293
  -5,375
  -6,577
  -7,883
  -9,271
  -10,719
  -12,204
  -13,703
  -15,197
  -16,670
  -18,107
  -19,501
  -20,846
  -22,138
  -23,380
  -24,574
  -25,726
  -26,843
  -27,933
  -29,005
  -30,068
  -31,132
  -32,207
  -33,300
  -34,423
  -35,582
  -36,787
  -38,046
  -39,366
Issuance/(repayment) of debt, $m
  489
  2,147
  2,738
  3,433
  4,211
  5,059
  5,968
  6,922
  7,908
  8,913
  9,925
  10,933
  11,930
  12,910
  13,869
  14,806
  15,720
  16,614
  17,491
  18,355
  19,211
  20,064
  20,920
  21,785
  22,665
  23,566
  24,494
  25,454
  26,451
  27,491
  28,580
Issuance/(repurchase) of shares, $m
  -2
  2,430
  3,105
  3,885
  4,750
  5,688
  6,682
  7,716
  8,772
  9,835
  10,891
  11,925
  12,930
  13,899
  14,827
  15,714
  16,559
  17,365
  18,136
  18,878
  19,597
  20,299
  20,990
  21,679
  22,371
  23,074
  23,794
  24,537
  25,309
  26,117
  26,964
Cash from financing (excl. dividends), $m  
  471
  4,577
  5,843
  7,318
  8,961
  10,747
  12,650
  14,638
  16,680
  18,748
  20,816
  22,858
  24,860
  26,809
  28,696
  30,520
  32,279
  33,979
  35,627
  37,233
  38,808
  40,363
  41,910
  43,464
  45,036
  46,640
  48,288
  49,991
  51,760
  53,608
  55,544
Total cash flow (excl. dividends), $m
  245
  1,234
  1,550
  1,944
  2,384
  2,864
  3,378
  3,918
  4,476
  5,045
  5,618
  6,189
  6,753
  7,308
  7,851
  8,381
  8,899
  9,405
  9,901
  10,390
  10,875
  11,357
  11,842
  12,332
  12,830
  13,340
  13,865
  14,408
  14,973
  15,562
  16,178
Retained Cash Flow (-), $m
  -3,414
  -2,624
  -3,359
  -4,213
  -5,167
  -6,209
  -7,323
  -8,494
  -9,704
  -10,938
  -12,179
  -13,417
  -14,641
  -15,843
  -17,020
  -18,169
  -19,291
  -20,388
  -21,465
  -22,525
  -23,575
  -24,622
  -25,673
  -26,734
  -27,814
  -28,920
  -30,058
  -31,236
  -32,460
  -33,737
  -35,073
Prev. year cash balance distribution, $m
 
  34
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -1,356
  -1,810
  -2,270
  -2,784
  -3,345
  -3,945
  -4,576
  -5,228
  -5,892
  -6,561
  -7,228
  -7,887
  -8,535
  -9,169
  -9,788
  -10,393
  -10,984
  -11,564
  -12,135
  -12,700
  -13,264
  -13,831
  -14,402
  -14,984
  -15,580
  -16,193
  -16,828
  -17,487
  -18,175
  -18,894
Discount rate, %
 
  8.00
  8.40
  8.82
  9.26
  9.72
  10.21
  10.72
  11.26
  11.82
  12.41
  13.03
  13.68
  14.37
  15.09
  15.84
  16.63
  17.46
  18.34
  19.25
  20.22
  21.23
  22.29
  23.40
  24.57
  25.80
  27.09
  28.45
  29.87
  31.36
  32.93
PV of cash for distribution, $m
 
  -1,256
  -1,540
  -1,761
  -1,953
  -2,103
  -2,202
  -2,243
  -2,227
  -2,156
  -2,037
  -1,879
  -1,693
  -1,490
  -1,282
  -1,079
  -887
  -712
  -558
  -428
  -320
  -233
  -165
  -114
  -77
  -50
  -32
  -20
  -12
  -7
  -4
Current shareholders' claim on cash, %
  100
  82.5
  69.2
  58.8
  50.7
  44.3
  39.1
  34.8
  31.3
  28.4
  25.9
  23.9
  22.1
  20.6
  19.3
  18.1
  17.1
  16.2
  15.4
  14.7
  14.0
  13.5
  12.9
  12.4
  12.0
  11.6
  11.2
  10.9
  10.6
  10.2
  10.0

Mid-America Apartment Communities, Inc. is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It is engaged in acquisition, redevelopment, new development, property management, and disposition of multifamily apartment communities. Mid-America Apartment Communities, Inc. was founded in 1977 and is based in Memphis, Tennessee.

FINANCIAL RATIOS  of  Mid-America Apartment Communities (MAA)

Valuation Ratios
P/E Ratio 54.2
Price to Sales 10.2
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 23.7
Price to Free Cash Flow -294.5
Growth Rates
Sales Growth Rate 7.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 5.9%
Cap. Spend. - 3 Yr. Gr. Rate 14.9%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 70.2%
Total Debt to Equity 70.2%
Interest Coverage 3
Management Effectiveness
Return On Assets 3.9%
Ret/ On Assets - 3 Yr. Avg. 5%
Return On Total Capital 2.4%
Ret/ On T. Cap. - 3 Yr. Avg. 3.3%
Return On Equity 4.5%
Return On Equity - 3 Yr. Avg. 6.9%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 68.9%
Gross Margin - 3 Yr. Avg. 68.2%
EBITDA Margin 61.7%
EBITDA Margin - 3 Yr. Avg. 65.7%
Operating Margin 24.2%
Oper. Margin - 3 Yr. Avg. 24.8%
Pre-Tax Margin 20.1%
Pre-Tax Margin - 3 Yr. Avg. 22.9%
Net Profit Margin 18.8%
Net Profit Margin - 3 Yr. Avg. 21.9%
Effective Tax Rate 0.9%
Eff/ Tax Rate - 3 Yr. Avg. 0.8%
Payout Ratio 117.5%

MAA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MAA stock intrinsic value calculation we used $1125 million for the last fiscal year's total revenue generated by Mid-America Apartment Communities. The default revenue input number comes from 2016 income statement of Mid-America Apartment Communities. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MAA stock valuation model: a) initial revenue growth rate of 40.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8%, whose default value for MAA is calculated based on our internal credit rating of Mid-America Apartment Communities, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Mid-America Apartment Communities.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MAA stock the variable cost ratio is equal to 72.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for MAA stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.7% for Mid-America Apartment Communities.

Corporate tax rate of 27% is the nominal tax rate for Mid-America Apartment Communities. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MAA stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MAA are equal to 800.6%.

Life of production assets of 27.9 years is the average useful life of capital assets used in Mid-America Apartment Communities operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MAA is equal to -3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $6414 million for Mid-America Apartment Communities - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 113.581 million for Mid-America Apartment Communities is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Mid-America Apartment Communities at the current share price and the inputted number of shares is $11.5 billion.

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COMPANY NEWS

▶ MAA Announces Regular Quarterly Preferred Dividend   [Jun-01-17 04:20PM  PR Newswire]
▶ MAA Announces Quarterly Common Dividend   [May-23-17 04:32PM  PR Newswire]
▶ 3 Top Residential REIT Stocks to Buy in 2017   [May-19-17 10:03AM  Motley Fool]
▶ MAA Announces Pricing of Senior Unsecured Notes Offering   [May-02-17 04:32PM  PR Newswire]
▶ MAA updates its $4B merger integration, trends in rent increases   [May-01-17 01:50PM  American City Business Journals]
▶ Mid-America Apartment Communities reports 1Q results   [Apr-26-17 04:59PM  Associated Press]
▶ MAA Reports First Quarter Results   [04:20PM  PR Newswire]
▶ This Stock Has a 3.4% Dividend and Lots of Room to Grow   [Apr-22-17 07:27AM  Motley Fool]
▶ Memphis-based company No. 1 in nation for apartment ownership   [Apr-09-17 05:30PM  American City Business Journals]
▶ /C O R R E C T I O N -- MAA/   [Mar-23-17 07:02PM  PR Newswire]
▶ 5 Top Dividend Stocks in Residential REITs   [Mar-14-17 08:27AM  Motley Fool]
▶ 5 Top Dividend Stocks in Residential REITs   [08:27AM  at Motley Fool]
▶ MAA Announces Regular Quarterly Preferred Dividend   [Mar-01-17 04:20PM  PR Newswire]
▶ MAA Announces 6% Increase in Common Dividend   [Dec-08-16 04:16PM  PR Newswire]
▶ MAA Announces Regular Quarterly Preferred Dividend   [Dec-02-16 04:57PM  PR Newswire]
▶ MAA and Post complete merger   [09:00AM  PR Newswire]
▶ Mid-America Apartment, AmSurg to join S&P 500   [Nov-29-16 06:21PM  at MarketWatch]
▶ As a REIT merger and as a company, JBG Smith will be unrivaled   [Oct-31-16 04:43PM  at bizjournals.com]
▶ MAA updates investors on $4 billion Post merger   [05:05PM  at bizjournals.com]
▶ MAA Reports Third Quarter Results   [04:20PM  PR Newswire]
▶ MAA receives PILOT, moving HQ to Germantown   [11:13AM  at bizjournals.com]
▶ MAA dodges cooling apartment markets   [Oct-10-16 12:30PM  at bizjournals.com]
▶ When the market eventually cools, MAA will be ready   [03:00PM  at bizjournals.com]
▶ Luxe apartment complex near Galleria to open   [Sep-28-16 12:30PM  at bizjournals.com]
▶ MAA Announces Quarterly Common Dividend   [Sep-27-16 04:27PM  PR Newswire]
Stock chart of MAA Financial statements of MAA Annual reports of MAA
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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