# P/FFO — Price-to-FFO

Stock price divided by FFO per share.

## Definition

P/FFO is the REIT version of P/E. Because EPS is reduced by real-estate depreciation, a REIT's P/E looks far higher than what investors pay for its rents; P/FFO prices the stock on funds from operations instead.

## Formula

Stock Price ÷ FFO per Share

## Why it matters

Compare REITs on P/FFO, not P/E. Like P/E it bakes in growth and risk expectations, and it differs by property type: net-lease and data-centre REITs trade at higher multiples than office or retail.

## How Standard Equity uses it

Takes P/E's place for REITs in the main table (average historical P/FFO), the header (P/FFO and P/FFO TTM, a dash if the REIT has no FFO, never the GAAP P/E), the Peers column (ranked against REIT peers by P/FFO), the SE Grade's price position (against the REIT's own 10-year P/FFO) and the Reference Value's multiple. The weekly Catalogue Class ignores a REIT's GAAP P/E, since it has no P/FFO history.

## The metric

| Category   | REITs      |
| ---------- | ---------- |
| Unit       | x          |
| Applies to | REITs only |

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