In This Article:
- By GF Value
The stock of Four Corners Property Trust (NYSE:FCPT, 30-year Financials) shows every sign of being fairly valued, according to GuruFocus Value calculation. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. At its current price of $27.3 per share and the market cap of $2.1 billion, Four Corners Property Trust stock is believed to be fairly valued. GF Value for Four Corners Property Trust is shown in the chart below.
Because Four Corners Property Trust is fairly valued, the long-term return of its stock is likely to be close to the rate of its business growth, which averaged 2.8% over the past five years.
Link: These companies may deliever higher future returns at reduced risk.
Since investing in companies with low financial strength could result in permanent capital loss, investors must carefully review a company's financial strength before deciding whether to buy shares. Looking at the cash-to-debt ratio and interest coverage can give a good initial perspective on the company's financial strength. Four Corners Property Trust has a cash-to-debt ratio of 0.02, which ranks worse than 78% of the companies in REITs industry. Based on this, GuruFocus ranks Four Corners Property Trust's financial strength as 4 out of 10, suggesting poor balance sheet. This is the debt and cash of Four Corners Property Trust over the past years:
It poses less risk to invest in profitable companies, especially those that have demonstrated consistent profitability over the long term. A company with high profit margins is also typically a safer investment than one with low profit margins. Four Corners Property Trust has been profitable 8 over the past 10 years. Over the past twelve months, the company had a revenue of $175.3 million and earnings of $1.07 a share. Its operating margin is 61.83%, which ranks better than 72% of the companies in REITs industry. Overall, GuruFocus ranks the profitability of Four Corners Property Trust at 6 out of 10, which indicates fair profitability. This is the revenue and net income of Four Corners Property Trust over the past years: