This Stock Offering Yielding 7.5% Monthly Dividends Might Pave the Way to a Prosperous Future for You
This Stock Offering Yielding 7.5% Monthly Dividends Might Pave the Way to a Prosperous Future for You
Investing in dividend stocks can lead to substantial profits. Over the last 50 years, dividend-paying companies have surpassed non-payers by more than double, yielding an average annual total return of 9.2%, according to data from Ned Davis Research and Hartford Funds. Dividend growers have even outperformed, averaging a 10.2% return annually.
A 10% annual total return is quite substantial and would enable investors to effectively double their money every 7 years.
One such high-performing dividend stock is EPR Properties (EPR 0.18%), which could prove to be a lucrative investment in the near future.
Your Path to Regular Monthly Income
EPR Properties is an Real Estate Investment Trust (REIT) that specializes in investing in experial properties, such as movie theaters, eat-and-play venues, and attractions. The company owns 352 properties leased to over 200 tenants. These tenants pay rent, forming a relatively steady income stream for EPR Properties.
This year, EPR Properties forecasts generating between $4.80 and $4.92 per share in Funds From Operations (FFO) as adjusted. The company pays a monthly dividend of $0.285 per share, equating to $3.42 annually, resulting in a decent dividend payout ratio of approximately 70%. This gives the company a solid financial cushion while allowing it to maintain a substantial cash flow for new investments.
As of now, EPR Properties' dividend yields 7.5%. This is substantially higher than the S&P 500's dividend yield, which is less than 1.5%. Translation: $1,000 invested in the REIT would yield approximately $75 in dividend income yearly, whereas the equivalent investment in an S&P 500 index fund would yield less than $15.
Steadily Expanding
Over the years, EPR Properties has invested over $6.9 billion to build its real estate portfolio. Yet, the company sees a $100 billion potential market for experial real estate acquisitions and developments in the future. EPR Properties focuses on several types of properties, including eat-and-play, gaming, experial lodging, ski, attractions, cultural, live venues, and fitness and wellness properties.
In 2023, EPR Properties has invested $214.6 million in experial properties. This includes the acquisition of a single attraction property for $33.4 million and $89.6 million in financing investments. The rest was spent on development, redevelopment, and joint venture projects. EPR Properties anticipates investing between $225 million and $275 million in total for the year. It has already committed to invest $150 million over the next two years in experial development and redevelopment projects.
These investments are expected to boost EPR Properties' cash flow and dividends. It's on track to raise its FFO as adjusted by 3.2% per share this year. Additionally, it has already increased its dividend by 3.6% per share this year.
EPR Properties believes it can maintain a 3% to 4% annual FFO growth rate, enabling it to boost its dividend at a similar pace. This growth is underpinned by its substantial investment opportunity and financial flexibility. Beyond its post-dividend free cash flow, EPR Properties has ample liquidity, with $35.3 million in cash and only $169 million outstanding in its $1 billion credit facility.
Furthermore, EPR Properties can continue to recycle capital. It has already sold $65.1 million in properties this year, realizing a $16 million profit, including vacant theaters. The REIT plans to sell between $70 million and $100 million in non-core properties this year. It also possesses a small educational portfolio, which comprises 60 early childhood education centers and nine private schools, which it could sell in the future to fund accretive new investments.
All in all, EPR Properties' mix of high dividend yields and modest earnings growth could contribute to an impressive total return. CEO Greg Silvers stated during the REIT's third-quarter earnings conference call: "We can still comfortably grow in that 3% to 4% range with what we're doing. And combine that with our dividend, it's still what we think a very attractive double-digit kind of total shareholder return." An investment in EPR Properties could provide you with a much more prosperous future.
In light of EPR Properties' impressive dividend yield and potential for growth, investing in this REIT could be an excellent way to diversify your finance portfolio and generate consistent monthly income. With its strong financial position and promising investment opportunities, EPR Properties may significantly contribute to increasing your overall return on investment, making it a potential lucrative choice for money allocation in the finance sector.