Is Dynex Capital, Inc. overvalued or undervalued?

As of 22 April 2024, the valuation grade for Dynex Capital, Inc. has moved from risky to very attractive, indicating a significant improvement in its investment appeal. Based on the current metrics, the company appears undervalued, particularly with a P/E ratio of 18, a price to book value of 0.93, and an EV to EBITDA of 2.52. In comparison, peers such as CBL & Associates Properties, Inc. have a P/E of 14.63 and an EV to EBITDA of 2.86, while Piedmont Office Realty Trust, Inc. shows a negative P/E of -24.40, highlighting Dynex's relative valuation strength.
Despite its attractive valuation, Dynex has underperformed against the S&P 500 over various periods, with a 1-year return of -3.51% compared to the index's 17.14%. This trend of underperformance continues over longer horizons, suggesting that while the stock may be undervalued, market sentiment has not favored it recently.