Should You Buy EPR Properties While It's Below $55?

Core Viewpoint - EPR Properties has resumed and increased its dividend after suspending it during the pandemic, but concerns remain about its stock price and reliance on movie theaters [1][3][4]. Company Overview - EPR Properties specializes in experiential real estate, owning properties such as amusement parks, ski resorts, and movie theaters, which are designed for group gatherings [2]. - The pandemic significantly impacted these properties, leading to a temporary suspension of dividends due to uncertainty [2]. Financial Recovery and Dividend Strategy - After a year without dividends, EPR Properties restored and has since increased its dividend multiple times, although it remains below pre-suspension levels [3]. - The company’s adjusted funds from operations (FFO) payout ratio was a reasonable 70% in Q4, indicating financial stability and the ability to manage its portfolio without immediate dividend cuts [6]. Long-term Strategy and Concerns - EPR Properties aims to diversify its portfolio, addressing concerns about its heavy reliance on movie theaters, which constitute about 37% of its assets [4][5]. - The financial health of the movie theater segment is weaker than pre-pandemic levels, with lower rental coverage, prompting management to plan for a gradual reduction of this exposure [5][6]. Market Position and Investment Considerations - The stock price has struggled to maintain levels around $55, reflecting ongoing market concerns despite the high dividend yield of 6.7%, which is significantly higher than the S&P 500's yield of 1.2% [4][6]. - EPR Properties may appeal to investors willing to accept higher risk for greater yield, as management is cautiously optimistic about future growth while working to improve the portfolio [7].