EPR Properties: Time to Bid Farewell After 35% Surge

EPR Properties' stock has risen 35% since a Seeking Alpha article in November, and including dividends, it has increased around 40%. The author of the article has downgraded the company's rating, suggesting it is time to say goodbye.

EPR Properties (NYSE: EPR) has seen a remarkable 35% increase in its stock price since November, with dividends pushing the total gain to around 40%. However, the author of a recent Seeking Alpha article has downgraded the company's rating, suggesting it may be time to part ways with the investment. The author's rationale centers on valuation and the relative attractiveness of other REITs.

The author highlights that while EPR Properties has provided significant returns, the stock's current valuation is no longer aligned with the author's investment criteria. The P/AFFO ratio has increased to around 12x from a historic valuation of 8.71x, making it relatively expensive compared to the author's preferred valuation range. Additionally, the author points out that the company's management has been successful in de-risking its portfolio by focusing on non-theater assets, which has led to a more balanced and less risky investment.

The author also mentions that EPR Properties' dividend yield, while still attractive, has decreased due to the stock's appreciation. The current yield is around 5.8%, which is slightly above the yields of other high-yielding REITs. However, the author believes that the market is not fully appreciating the value of EPR Properties' portfolio and that there are more beaten-down REITs with better relative valuations.

The author concludes by stating that while EPR Properties remains on their watchlist, they will likely sell their remaining 16.4% stake in the coming weeks. The author encourages readers to consider other REITs with potentially better valuations and higher growth prospects.

References:
[1] https://seekingalpha.com/article/4801949-epr-properties-its-time-to-say-goodbye-rating-downgrade
[2] https://www.ainvest.com/news/epr-properties-declares-0-295-monthly-dividend-maintaining-yield-5-93-2507/
[3] https://finance.yahoo.com/news/over-40-ultra-high-yield-070600851.html