EPR Properties: A Winning Investment with Solid Growth and Attractive Valuation

EPR Properties, a real estate investment trust, has delivered a 1,800% total return since its IPO in 1997. The REIT grew its funds from operations (FFO) by 5.3% in Q1 and has a solid outlook, boosting its 2025 guidance. EPR Properties trades at a low valuation, with a price-to-FFO ratio of less than 12, and offers a high dividend yield of around 6%. The REIT has a conservative payout ratio and a solid investment-grade balance sheet, making it a smart investment to buy today.

EPR Properties (NYSE: EPR), a real estate investment trust (REIT), has been a standout performer in the market, delivering a remarkable 1,800% total return since its initial public offering (IPO) in 1997. The company's recent financial performance and strategic outlook position it as an attractive investment option for income-seeking investors.

In the first quarter of 2025, EPR Properties reported a robust 5.3% growth in funds from operations (FFO), driven by contractual rent increases and strong box office revenues. The REIT has been actively investing in its experiential real estate portfolio, with significant acquisitions and development projects lined up for the next two years. This growth trajectory is reflected in the REIT's updated 2025 guidance, which now projects an FFO per share range of $5.00 to $5.16, up from the prior range of $4.94 to $5.14 [1].

One of the key attractions of EPR Properties is its valuation. The REIT trades at a price-to-FFO ratio of less than 12, significantly below the typical valuation multiple for net lease REITs, which usually trade at around 15 times their FFO. This low valuation is a significant factor contributing to EPR Properties' high dividend yield of around 6%, which is several times higher than the S&P 500's yield of approximately 1.2% [1].

The REIT's dividend payout is not only high but also stable and secure. The monthly dividend of $0.295 per share, payable on August 15, 2025, represents a 5.93% forward yield [2]. This payout aligns with the company's conservative dividend policy, with the payout ratio at around 70% of its FFO as adjusted, leaving a cushion for future investments and growth [1].

EPR Properties' solid investment-grade balance sheet provides additional financial flexibility, enabling the REIT to fund new investments and maintain its high dividend yield. The company's investment pipeline is robust, with a total addressable market for experiential real estate estimated at over $100 billion, leaving significant room for growth [1].

While EPR Properties has been a smart investment over the years, it's essential to consider the broader market context. The Motley Fool Stock Advisor team did not include EPR Properties in their top 10 stock picks, but it is worth noting that the team's recommendations have historically produced impressive returns [3].

In conclusion, EPR Properties offers a compelling combination of reliable income, solid growth potential, and an attractive valuation. As interest rates fall and its stock price rises, the REIT could accelerate its growth rate, making it a smart investment opportunity for those seeking passive income and above-average total returns.

References:
[1] https://www.nasdaq.com/articles/epr-properties-smartest-investment-you-can-make-today
[2] https://www.ainvest.com/news/epr-properties-declares-0-295-monthly-dividend-maintaining-yield-5-93-2507/
[3] https://www.gurufocus.com/news/2981251/epr-properties-epr-receives-price-target-boost-from-ubs-epr-stock-news