Is MFA Financial, Inc. overvalued or undervalued?

As of 22 February 2024, the valuation grade for MFA Financial, Inc. has moved from risky to very attractive, indicating a significant improvement in its perceived value. The company appears undervalued, supported by a P/E ratio of 7, a Price to Book Value of 0.53, and an EV to EBITDA ratio of 0.78, all of which suggest that the stock is trading at a discount compared to its earnings and assets.
In comparison to peers, MFA Financial, Inc. has a more favorable valuation profile than The GEO Group, Inc., which has a P/E ratio of 32.63 and is considered expensive, and Global Net Lease, Inc., which is rated risky with a P/E of -16.68. Despite the attractive valuation metrics, MFA has struggled in recent performance, with a one-year return of -26.01% compared to the S&P 500's 17.14%, highlighting the disconnect between its valuation and market performance.