Article: Morningstar Moves to Discounted Cash-Flow Model to Analyze REITs.

CHICAGO, July 28 /PRNewswire-FirstCall/ -- Almost as hot as the real estate market is the debate on how to value real estate investment trusts (REITs), companies that invest in buildings such as malls, offices, warehouses and apartments. Should investors determine a REIT's worth by focusing on the value of the buildings -- known as the net-asset value (NAV) model? Or, should they treat REITs like other stocks-valuing them for their management, earnings and the sum total of future cash flows, discounted to the present- known as the discounted cash-flow (DCF) model?

Which is better -- NAV or DCF? Morningstar believes the answer is DCF and just began applying a ...

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