Four Corners Property Trust Inc. Common Stock (FCPT) fair value

ACCE thesis

Four Corners Property Trust owns and leases roughly 1,500 freestanding restaurant and other service-oriented retail properties, most of them triple-net leased to franchisees of chains such as Applebee's, Taco Bell and Jack in the Box, with long lease terms and rent escalators that give it a predictable cash flow stream. That lease structure, where tenants carry the operating costs and the REIT collects contractual rent, is the core of the case: the 85.6% gross margin and 55.1% operating margin reflect how little the business has to spend to earn its rent. Revenue growth of 7.7% comes mainly from acquisitions and rent escalators rather than from same-store sales, so the thesis depends on a steady pipeline of new net-lease purchases at spreads above its cost of capital. At a 19.8x trailing P/E and 20.2x forward, the market is paying a full multiple for a 7.6% ROE, so the stock is priced for continued disciplined growth rather than a re-rating. The sub-$3B market cap and absence from major indices limit liquidity, and a score of 50/100 says the quant profile is only middling, so this merits a deeper look at tenant concentration, lease expirations and the cost of its capital before it earns a place in the portfolio.