02-25-2014, 10:22 AM
(02-25-2014, 10:10 AM)cazantyl Wrote: My concern with ARCP is their negative EPS. Certainly their yield is extremely attractive but until that EPS can turn north of $0 I'd be afraid that the yield is unsustainable, and with an EPS that far into the negatives they'll have a long way to go before hitting even. Is there something I'm missing with REITs though that makes a negative EPS not a red flag?
Yes you are missing something very important. EPS is the wrong metric for valuing REITs. The correct metric is FFO (funds from operations).