EPR Properties vs Stag Industrial
Dividend investors are often looking for income to replace their retirement salary. Buying a company that pays monthly dividends is a great solution as it is probably as close to your salary as you can ride on Wall Street.
But is it worth reaching yields on such stocks? EPR Properties (NYSE: EPR)Which has a dividend yield of 7.1%? Or is it better to play safely at the 4.3% yield provided by a fellow Real Estate Investment Trust (REIT)? Stag Industrial (NYSE: Stag)?
The EPR properties were known as the Entertainment Properties Trust. REIT Owned. Essentially, EPR invests in assets aimed at bringing consumers together into group settings. This includes many other types of properties, such as amusement parks, cinemas, ski resorts and more. This unique focus is hoped to help protect EPR’s business from the ongoing transition to digital life, especially on the retail side of the equation.
That said, bringing consumers together into a group setting was a terrible focus of focusing during the coronavirus pandemic. Such businesses were often closed because they were not considered essentials. The EPR has suspended dividends for about a year, ensuring enough liquidity to survive and help customers survive through the pandemic.
Dividends are now returning at lower levels and are growing again. So it certainly survived, but it is still trying to bring itself back to the form of battle.
The big story here is that over a third of REIT rental rolls are tied to cinemas. That business is weaker than before the pandemic than before today’s pandemic, compared to 1.7 times in 2019. The rest of the EPR’s business is stronger, with rents of 2.6 times, 2.6 times compared to 2.0 times. 2019. In particular, management has been actively reducing exposure to cinemas.
In other words, overall it appears that the EPR is moving in the right direction. But there is a cost. Adjustment Funds from operation (FFO) will fall year-on-year in the first nine months of 2024, particularly low for the entire year. The adjusted FFO payout rate was 66% in the third quarter, leaving plenty of space to deal with adversity, but investors take shape given the high yields offered here It seems he’s not satisfied with the turnaround he’s doing.
Stags are a little more boring. REITs purchase industrial assets and use a net lease approach. This means that tenants pay most property-level operating costs. The industrial assets it purchases are essential to the companies that occupy them, and tend to include real estate such as manufacturing and distribution facilities. As Stag grew, Stag has reached a larger market, but tends to buy in tier 2 markets where competition is less and has an advantage over what it is.