Good Times? Bad Times?

Core Viewpoint - NNN REIT, Inc. and VICI Properties Inc. are highlighted as attractive investment opportunities for defensive investors, particularly in the context of economic uncertainty and potential recessions. Both companies exhibit strong fundamentals, stable income generation, and long-term growth potential. Group 1: NNN REIT, Inc. - NNN REIT, Inc. operates under a triple-net lease structure, which transfers most property-level expenses to tenants, providing stability and predictability in cash flows [4] - As of March 31, 2024, NNN's annual base rent is $831,010,000, with a weighted average remaining lease term of 10.0 years, indicating long-term stability [2][4] - The company has a conservative approach to debt, with an average maturity of 11.8 years, and approximately 35% of its bonds maturing in 2048 or later [18] - NNN has maintained a 34-year streak of annual dividend increases, demonstrating resilience during economic downturns [32] - The company is positioned as a defensive investment, having outperformed the S&P 500 during past recessions [14][6] Group 2: VICI Properties Inc. - VICI primarily invests in casino properties but is diversifying into non-casino real estate, with a focus on experiential sectors [22][30] - The company has a strong tenant base with an average lease term of 41.5 years, providing stability in cash flows [22] - VICI's AFFO guidance for 2024 is $2.235 per share, indicating a valuation of approximately 12.5x forward AFFO, which is lower than its historical valuation [22][27] - The company has initiated a "partner property growth fund," committing $700 million to tenants like The Venetian, which will drive rent growth [25] - VICI's business has expanded significantly over the past 2.5 years, with improved earnings, credit ratings, and dividends, despite a lower market valuation [27]