2024-07-21 07:12:07 ET
Summary
- Four Corners Property Trust has made six acquisitions since the last review, diversifying away from its high tenant concentration.
- Top-tier business metrics include high occupancy rate, decent rent escalators, and solid WALT.
- With higher cap rates and higher stock price, FCPT's investment spreads are likely to improve.
- FCPT's investment volume has decreased, which should be on the shareholders' radar.
- I expect the valuation gap to occur between FCPT and its competitors, as they are not subject to FCPT's largest risk - high tenant exposure.
Investment Thesis
I am still unhappy with the share of Four Corners Property Trust's (FCPT) largest tenant in its ABR. However, I appreciate the Company's efforts to diversify its tenant structure, especially given the positive investment spreads. I am a long-term investor with a buy-and-hold approach (unless material adverse change occurs), so I don't feel comfortable allocating my resources to FCPT - I prefer some of its competitors. Yes, FCPT has strong business metrics regarding occupancy rate, WALT, and a solid balance sheet featuring a fixed-rated structure, no upcoming debt maturities until November 2025, and solid fixed charge coverage....
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Four Corners Property Trust Continues To Diversify With Lower Investment Volume