Why EPR Properties (EPR) is Among the Best Stocks That Pay Monthly Dividends in 2024

When it comes to investing, there are numerous strategies and approaches to choose from. One popular method is income investing, which focuses on generating a steady stream of income from investments. This can be particularly appealing to retirees or those looking for a more passive income stream. One way to achieve this is by investing in stocks that pay monthly dividends. In 2024, EPR Properties (NYSE:EPR) stands out as one of the best stocks that pay monthly dividends. Let's explore why.

Experiential Real Estate: A Unique Niche

EPR Properties is a REIT that specializes in experiential real estate. This unique niche includes properties such as movie theaters, amusement parks, ski resorts, and educational facilities. These properties are attractive to investors because they are often essential to the businesses that occupy them, making them less likely to move or close. Additionally, the real estate is typically a significant portion of the tenant's business, ensuring a steady stream of income for the landlord.



Diversification and Adaptability

EPR Properties has been diversifying its portfolio to reduce its reliance on movie theaters, which have been facing challenges due to streaming services and changing consumer behavior. In Q2 2024, EPR sold $10 million in real estate leased to theaters and invested just under $47 million in other categories. This strategy has allowed EPR to maintain a high occupancy rate of 99% at the end of the third quarter of 2024.

Strong Financial Performance

EPR Properties' financial performance has been robust, despite the challenges faced by the movie theater industry. In Q2 2024, FFOAA (Funds From Operations As Adjusted) came in at $1.22/share, down from $1.28/share in Q2 2023. However, it's important to note that the 2023 figure included rent payments that were deferred in 2020 due to the pandemic. Excluding these payments, EPR's FFOAA growth has been strong, with increases of 116% in 2021, 52% in 2022, and 10% in 2023.



Monthly Dividends and Growth Potential

EPR Properties pays a monthly dividend with an annualized yield of over 7.5%. This high yield, combined with the company's strong financial performance, makes EPR an attractive option for income investors. The company's guidance suggests that FFOAA will grow by approximately 3% year-over-year in 2024, excluding the impact of the 2020 rent deferral payments. Looking ahead, EPR expects to trend closer to a growth rate of around 5% per year.

Conclusion

EPR Properties' unique focus on experiential real estate, combined with its diversification strategy and strong financial performance, makes it one of the best stocks that pay monthly dividends in 2024. With a high occupancy rate, a robust dividend yield, and a growth potential of around 5% per year, EPR is an attractive option for income investors looking for a steady stream of income. As always, it's important to do your own research and consider your personal financial situation before making any investment decisions. However, EPR Properties is certainly worth considering as a potential addition to your income-focused portfolio.