EPR Properties generated second quarter AFFO of $1.20 per share, for 140% dividend coverage. The REIT faces a $136.6 million debt maturity in a few weeks against a $2.8 billion total debt balance. Interest rates are set for a cut in September, paving the way for the commons and preferreds to rally.
EPR Properties is a triple net lease REIT operating within the non-gaming experiential property sector. Despite challenges from the COVID-19 pandemic, EPR's theater segment shows signs of recovery with solid box office numbers, recovered rent coverage, and ongoing portfolio reorganization. Its high-yielding dividends aren't a value trap as they are well-covered by improving credit metrics supported by high occupancy and great WALT.
EPR Properties (NYSE:EPR ) Q2 2024 Earnings Conference Call August 1, 2024 8:30 AM ET Company Participants Brian Moriarty - SVP, Corporate Communications Gregory Silvers - Chairman and CEO Gregory Zimmerman - EVP and CIO Mark Peterson - EVP and CFO Conference Call Participants Farrell Granath - Bank of America Smedes Rose - Citi John Kilichowski - Wells Fargo Michael Carroll - RBC Rob Stevenson - Janney Montgomery Scott Upal Rana - KeyBanc Capital Markets Operator Good day, and thank you for standing by. Welcome to the Q2 2024 EPR Properties Earnings Conference Call.
While the top- and bottom-line numbers for EPR Properties (EPR) give a sense of how the business performed in the quarter ended June 2024, it could be worth looking at how some of its key metrics compare to Wall Street estimates and year-ago values.
EPR Properties (EPR) came out with quarterly funds from operations (FFO) of $1.20 per share, missing the Zacks Consensus Estimate of $1.21 per share. This compares to FFO of $1.31 per share a year ago.
Looking beyond Wall Street's top -and-bottom-line estimate forecasts for EPR Properties (EPR), delve into some of its key metrics to gain a deeper insight into the company's potential performance for the quarter ended June 2024.
EPR Properties is an experiential REIT than has been beaten down for a few reasons. Realty Income is a steady income generator trading at 30% off its high.
EPR Properties offers a high starting yield of 7.93% with sustainable monthly dividends. The company appears to be undervalued based on peer data, historical P/FFO ratios, and from a dividend discount model perspective. Concerns include sensitivity to the economy, overexposure to theaters, and a dividend cut in 2020 affecting investor confidence.
Income on sale is something I will always take advantage of. Market sentiment has beaten down these two REITs to a super cheap price. I collect income from the market to meet my needs head-on.
EPR Properties' revenue and FFO per share have recovered to pre-COVID levels, while dividend per share has not yet increased, leaving room for future dividend hikes. Going forward, investors could benefit from an attractive 8% dividend yield with the potential for dividend and price increases. Business for theaters (37% of rental income) remains strained, with ticket sales number significantly below pre-covid levels. Long-term trends (e.g. online streaming) will continue to negatively affect the industry.
REITs have been one of the worst-performing sectors over the past several years. However, the fundamental performance of many REITs has been quite strong over this same period. This has created some highly compelling opportunities in the sector right now.
EPR Properties focuses on experiential real estate, offering stellar returns of over 1,300% since 1997. Stock trading at half its pre-Covid value, potential buying opportunity with interest rate decline. Low price to earnings ratio, strong balance sheet, and high dividend yield make EPR Properties undervalued compared to peers.