You would be hard pressed to find a stock with better chances of providing a higher potential for income and total returns than this one. It has the best combination of principal safety and monthly income, and with the recent sell-off, now is the best time to add it to your portfolio.
Few things are more All-American than a V8 powered muscle car. When I research the market, I find a lot of 4-cylinder powered stocks, a few V6’s, and a lot of dividend payers that have cracked heads and needing a tune-up. The V8 powered, running
on all cylinders, high-yield stock, however, is a rarity.
But, it’s not so rare that a few of them don’t exist in the market, and we can look at eight different reasons why EPR Properties (NYSE: EPR) deserves a spot in every income investors stock portfolio and one that you should just tuck away and hold onto forever.
Cylinder 1: Turning niches into a moat.
In the real estate investment trust (REIT) sector a too-focused niche in the real estate market can lead to trouble if an outside force turns the niche into a trap. Consider the case of Medallion Financial Corp (Nasdaq: TAXI), a business development company (BDC) that financed the purchase taxi medallions. The development of ride-sharing services like Uber has destroyed the value of those medallions and TAXI’s business prospects. In contrast, EPR has built a knowledge base that allows it to be the premier owner of entertainment focused properties. The company began as an owner of movie theater properties and has now expanded to cover a range of entertainment types.
EPR is the owner, with operator clients as the lessees of the following types of properties:
Cylinder 2: EPR has developed a new niche, one that can generate significant growth for the company.
In 2007, the company started to develop public charter and private school facilities. Currently, EPR owns 86 education facilities which account for 21% of annual net operating income. An additional 21 properties are under development. EPR does not start building a new school unless it has a signed lease contract. The number of charter schools in the U.S. is growing by 11% per year and the number of students is increasing at a 15% annual clip. There are one million potential students on waiting lists for new charter and private schools. This will be a growth niche for EPR for years to come.
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