Passive income is the holy grail of retirement planning, and the combination of real estate and dividend stocks has long been a favorite strategy for generating that elusive passive income. However, being a landlord is not always as passive as it seems, as many can attest to disrupted nights spent dealing with maintenance calls.
If you’re looking to benefit from the returns of real estate without the hands-on hassle, then real estate investment trusts (REITs) might just be the perfect solution for you. EPR Properties (EPR), a well-known REIT, offers investors the opportunity to capitalize on the real estate sector while enjoying the ease and convenience of dividend stocks.
Here’s a closer look at why EPR Properties stands out as a promising investment opportunity:
Business Overview
- EPR Properties operates as a triple net lease REIT, focusing on entertainment, recreation, and education properties. By adopting a triple net lease structure, the company offloads major real estate costs onto its tenants, resulting in reduced operating expenses.
- The company’s diverse portfolio spans over 363 locations across 44 states and Canada, with investments exceeding $6.8 billion. This broad geographic presence ensures both tenant and geographical diversity, mitigating risk and increasing stability.
Growth Prospects
- Despite the challenges posed by the pandemic, EPR Properties has shown resilience and is on a path to recovery. With a strong focus on experiential properties like movie theatres, ski resorts, and charter schools, EPR is poised to capitalize on the growing demand for unique experiences.
- The company anticipates steady growth in FFO-per-share, projecting a 3% annual increase over the next five years. EPR’s strategic investments in specialized properties and underpenetrated experiential segments signal promising growth potential in the evolving market landscape.
Competitive Advantage & Recession Performance
- EPR’s emphasis on experiential properties provides a shield against e-commerce threats, ensuring consistent foot traffic and revenue generation. While no company is recession-proof, EPR’s business model and competitive advantages position it favorably to weather economic downturns and sustain growth.
- Despite facing disruptions during the pandemic, EPR Properties has maintained a strong dividend track record. Following a brief suspension in 2020, the company reinstated its monthly dividend in 2021 and has since increased it by 4%, offering income investors a compelling 7.1% yield.
Dividend Analysis
- EPR’s annual dividend of $3.40 per share remains below pre-pandemic levels but presents an attractive opportunity for income-seeking investors. The company’s reasonably leveraged capital structure, backed by $1 billion credit revolver and prudent debt management, supports dividend safety and growth potential.
- With a secure dividend outlook and ongoing recovery in FFO, EPR Properties is well-positioned to enhance shareholder value through consistent dividend payments and potential increases over time.
In conclusion, EPR Properties emerges as a robust investment choice for income investors seeking high yields and monthly payouts. As the company continues to rebound post-pandemic and pursue growth opportunities in the experiential real estate market, EPR presents an appealing proposition for investors looking to diversify their portfolios with high-yield REITs.
Don’t miss out on the opportunity to explore more monthly dividend stock investments and compelling investment ideas for dividend growth stocks and high-yield securities. Stay informed and empowered with the right resources at your disposal. Happy investing!
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