Best Retirement Stocks: EPR Properties (EPR)
Dividend Yield: 5.5%
If you’ve been to a movie lately, it’s possible the theater you watched it in is owned by EPR Properties (NYSE:EPR). EPR is a Kansas City-based real estate investment trust (REIT) that specializes in the ownership of movie theaters and other entertainment-related real estate, along with some other interesting investments including the real estate on which 120 schools (public and private) sit.
In case you hadn’t noticed, retailers are getting hammered by the trend toward experiences and away from buying stuff. That’s especially true of the millennial generation, a group of 75 million Americans who value experience over ownership.
Well, experiences are EPR’s wheelhouse. Experience-based real estate is responsible for almost 74% of its revenue, putting this REIT in a prime position to benefit from this trend.
More importantly, EPR is well-managed and had the foresight over the past five years to de-risk its business by reducing its reliance on a few large tenants. In fiscal 2011, its top five tenants accounted for 64% of revenue; today, that’s down to about 45%. AMC Entertainment Holdings Inc (NYSE:AMC) is currently EPR’s largest tenant, accounting for 20% of its overall revenue.
I first recommended EPR back in April 2013, when its stock traded at $53.27. Today, it sits around $73.75 — 38% gains, and that doesn’t include the healthy 5%-plus dividend yield.
Long-term, I expect EPR to not just outperform the market, but also outperform this group of retirement stocks.