EPR Properties Stock: Buy, Sell, or Hold?

EPR Properties (NYSE: EPR) is a leading diversified experiential net lease real estate investment trust (REIT) that specializes in select enduring experiential properties. With a dividend yield of 6.93% and a forward dividend yield of 8.41%, EPR Properties offers an attractive income opportunity for investors. However, the decision to buy, sell, or hold EPR Properties stock depends on various factors, including the company's financial performance, dividend growth, and the broader market conditions.



Financial Performance and Dividend Growth
EPR Properties has a strong track record of financial performance and dividend growth. In 2023, the company's revenue was $698.02 million, an increase of 6.51% compared to the previous year. Earnings were $148.90 million, a decrease of -2.10%. However, the company's funds from operations (FFO) and adjusted funds from operations (AFFO) per diluted common share have been growing consistently, indicating strong cash flow generation.

EPR Properties' dividend yield is currently 6.93%, and the company has paid $3.43 per share in the past year. The dividend is paid every month, with the next ex-dividend date on Feb 28, 2025. The company's forward dividend yield is 8.41%, which is attractive compared to the average yield of REITs and other dividend-paying stocks.



Investment Spending and Capital Recycling
EPR Properties' investment spending and capital recycling activities have also contributed to its dividend growth. In 2023, the company's investment spending totaled $269.4 million, including $77.0 million for a mortgage note related to three premier resort and day spas in the Northeastern U.S. and $9.4 million for the acquisition of the company's third climbing gym in Belmont, California. The company also completed the sale of two cultural properties and one vacant theatre property for net proceeds totaling $46.2 million and recognized a gain on sale of $17.9 million.

Rising Interest Rates and Market Conditions
Rising interest rates can have an impact on REITs, including EPR Properties, as they may lead to higher borrowing costs, which could potentially reduce the company's earnings and dividend payouts. However, EPR Properties has a strong balance sheet with no borrowings on its $1.0 billion unsecured revolving credit facility and a consolidated debt profile that is all at fixed interest rates, which may help mitigate the impact of rising interest rates.

Comparing EPR Properties to other REITs in the market, it is important to consider the company's specific business model and the types of properties it invests in. EPR Properties focuses on experiential net lease real estate, which may be less sensitive to interest rate changes compared to other types of REITs, such as mortgage REITs or equity REITs that focus on office or retail properties.



Conclusion
EPR Properties' strong financial performance, consistent dividend growth, and attractive dividend yield make it an appealing investment opportunity for income-focused investors. However, the decision to buy, sell, or hold EPR Properties stock depends on the investor's individual risk tolerance and investment goals. Rising interest rates and market conditions may also impact the company's stock price and dividend yield. As always, it is essential to conduct thorough research and consider seeking the advice of a financial professional before making any investment decisions.