There’s something powerful, almost addictive, about waking up to income you didn’t have to actively work for. Passive income gives you more bang for your investment buck up front, and if you’ve chosen wisely, income producers raise their payouts over time, feeding a cycle of reinvestment and compounding that accelerates your path to financial independence.
And there’s one stock in particular that you may not want to stop buying. EPR Properties (NYSE: EPR) pays a monthly dividend with a yield hovering around 6.2%, and if you’re serious about generating recurring income, this REIT deserves your attention.
Key Points
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EPR pays a 6.2% monthly dividend backed by stable, triple-net leases, ideal for passive income growth.
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EPR invests in experiential real estate, tapping into a powerful consumer shift toward experiences over things.
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With a solid balance sheet and room to expand in a $100B+ market, EPR is built for steady dividend growth.
Is EPR a Cash Flow Producer?
What sets EPR apart is that unlike most REITs that invest in generic office buildings or shopping centers, EPR is all-in on experiential real estate, properties where people go to do things.
Here’s what most investors miss, experiences are becoming more valuable than things. The data backs it up: Millennials and Gen Z, who now outnumber Boomers, consistently prioritize experiences over material goods. That makes EPR’s real estate thesis not just unique, but more aligned with where consumer dollars are headed.
And EPR’s business model is built to withstand tough times thanks to triple-net leases that offload maintenance, taxes, and insurance to the tenant.
A Fortress of a Balance Sheet
Despite paying out a juicy monthly dividend, EPR isn’t stretching itself thin and management expects to generate between $5.00 and $5.16 in adjusted funds from operations per share this year. That’s more than enough to comfortably cover the $3.54 per share in annual dividends it pays.
And while other REITs have had to tap expensive credit markets or issue dilutive equity to survive, EPR is sitting pretty. It ended the first quarter with just $105 million drawn on its $1 billion credit facility, and over $20 million in cash.
It even retired $300 million in debt recently without needing to borrow new money, something very few REITs could manage in today’s higher-rate environment.
Plenty of Room to Grow
The part that gets me most excited, though, is what’s still ahead. EPR is a rare blend of high yield and growth. Management believes they can organically invest up to $300 million annually in new experiential real estate without stretching their balance sheet.
They’ve already started recycling capital by selling off select theater properties and a slice of their underperforming education assets, funneling that money into higher-return projects. That capital rotation strategy should support 3% to 4% annual FFO growth, which in turn supports steady dividend hikes. In fact, they already bumped the payout by 3.5% earlier this year.
Even more impressive is that EPR’s current portfolio stands at just over $6 billion, but they estimate the total experiential real estate market is about 16x that number. That’s a massive runway.
Why To Keep Hitting “Buy”
Economic downturns is likely to dent consumer spending on discretionary experiences but EPR survived the 2020-21 era, a huge stress test for experiential real estate, and came out stronger. That tells me a lot about management’s ability to navigate rough terrain.
The combination of a monthly payout, high yield, consistent growth, and exposure to a sector with long-term tailwinds is key to financial relief down the line