Monthly Dividend Showdown: EPR Properties vs. STAG Industrial

Alright, fellow income investors, let's dive into the world of monthly dividends and compare two REITs that have been making waves in the market: EPR Properties (EPR) and STAG Industrial (STAG). Both companies offer attractive yields and have their unique strengths, so let's break down the key factors to help you make an informed decision.



EPR Properties: The Experiential REIT

EPR Properties is a REIT that focuses on experiential properties, such as movie theaters, ski resorts, and amusement parks. These properties are designed to bring people together in group settings, creating memorable experiences. EPR's unique focus on experiential properties sets it apart from other REITs and offers investors an opportunity to tap into a growing market.

* Dividend Yield: EPR Properties offers a hefty dividend yield of 7.1%, which is significantly higher than the industry average and its historical average.
* Dividend Payout Ratio: EPR's dividend payout ratio is 66%, indicating that the company retains a substantial portion of its earnings for reinvestment and future growth.
* Rent Coverage Ratio: EPR's rent coverage ratio has improved for most of its business segments, with the rest of the portfolio showing a strong 2.6x coverage compared to 2.0x in 2019.
* Portfolio Diversification: EPR is actively reducing its exposure to movie theaters, which were particularly hard hit during the pandemic. This diversification helps to stabilize its dividend payments and ensures the company's long-term success.



STAG Industrial: The Stable REIT

STAG Industrial is a REIT that focuses on industrial assets, such as warehouses and light manufacturing facilities. These properties are typically more stable and less affected by economic downturns. STAG's net lease approach means that tenants pay for most property-level operating costs, providing a stable and predictable income stream.

* Dividend Yield: STAG Industrial offers a dividend yield of 4.3%, which is in line with its historical average and the industry average.
* Dividend Payout Ratio: STAG's dividend payout ratio is 73%, indicating that the company retains a substantial portion of its earnings for reinvestment and future growth.
* Consistent Dividend Growth: STAG has increased its dividend annually for over a decade, with a 10-year annualized growth rate of just under 2%. This steady growth is more reliable than EPR's dividend history, which includes a suspension during the pandemic.
* Strong Balance Sheet: STAG has a strong balance sheet, which gives it additional cash to fund new income-generating industrial real estate investments. This financial strength helps to ensure the sustainability of its dividend payments.



The Better Buy: EPR or STAG?

When it comes to choosing between EPR Properties and STAG Industrial, it ultimately depends on your risk tolerance and investment goals. If you're looking for a more conservative option with a proven track record of consistent performance, STAG might be the better choice. Its stable dividend growth, lower volatility, and diversified portfolio make it an attractive option for income-oriented investors.

On the other hand, if you're willing to accept higher risk in exchange for potentially higher returns, EPR Properties could be an appealing option. Its higher dividend yield, unique focus on experiential properties, and active portfolio diversification make it an exciting choice for more aggressive investors.

In conclusion, both EPR Properties and STAG Industrial have their unique strengths and offer attractive monthly dividend yields. The better buy ultimately depends on your personal preferences and risk tolerance. So, consider your investment goals and make an informed decision based on the information provided. Happy investing!