I also jumped on the 9% Preferred Series E of an interesting REIT called EPR Properties (EPR), a $2.38 billion trust that owns 114 megaplex movie theaters; nine entertainment retail centers; seven family entertainment centers where one can bowl, enjoy nightlife, or sit atop observational towers; 13 metro ski parks; three water parks; four golf complexes, and 48 public charter schools.
So I guess the kids can break out of a school owned by EPR, then enjoy all the entertainment the company offers.
This is a very interesting entertainment infrastructure play, in that the company doesn’t operate any of these locations. It leases them out, so it removes a degree of risk from being directly dependent on the revenue generated at each location. As long as EPR leases to credit-worthy tenants, it will be relatively insulated.
EPR sits on almost $1.5 billion in debt, but it’s only costing them about 5% in interest. The company turns a very handsome bottom-line profit of $93 million after preferred dividend payments. Once again, we have a preferred stock that investors are confident in, as it trades well above its $25 par, at almost $29.
I’m usually not comfortable paying this far above par for an issuance, but I’m in it for the dividend, which effectively yields 7.77%.
As of this writing, Lawrence Meyers was long all the aforementioned preferred securities mentioned, as well as BAC common shares. did not hold a position in any of the aforementioned securities. He is president of PDL Broker, Inc., which brokers financing, strategic investments and distressed asset purchases between private equity firms and businesses. He also has written two books and blogs about public policy, journalistic integrity, popular culture, and world affairs. Contact him at email@example.com and follow his tweets @ichabodscranium.