EPR Properties (EPR): The Undervalued REIT Play You Can’t Ignore in 2025

Wall Street sleeps on EPR Properties—again. While meme stocks and crypto hype suck up oxygen, this experiential REIT quietly prints cash from theaters, ski resorts, and water parks. Here's why it's a buy.

The Cash Flow Machine Nobody Talks About

EPR's portfolio—87% leased to recession-resistant entertainment tenants—spits out a 7.2% dividend yield. That's triple the S&P 500's payout, with contracts indexed to inflation. Try finding that in your overpriced tech ETFs.

Short-Term Pain, Long-Term Gain

Post-pandemic recovery hiccups? Please. Box office revenues just hit 92% of 2019 levels—and AMC, EPR's top tenant, actually turned profitable last quarter. Meanwhile, shorts got squeezed so hard their borrow rate hit 15%.

Buy EPR when the Fed pivots, and thank yourself later. Or keep chasing Dogecoin—your funeral.

Image source: Getty Images.

However, EPR rebounded nicely once its tenants were gradually allowed to reopen and an end to the era of social distancing was in sight. One of its largest tenants filed for bankruptcy protection in the wake of the shutdowns, but the matter was resolved in a favorable way. In a nutshell, EPR's business is performing quite well. Over the past five years, EPR has outperformed the total return of the S&P 500 by about 50 percentage points.

1 big reason to buy EPR Properties now

After a recent pullback, EPR trades for a low valuation of 10.8 times its full-year FFO (funds from operations) guidance, which is the real estate equivalent of earnings. The company has a 6.4% dividend yield that is paid to investors in monthly installments.

To be fair, there are some good reasons for the cheap valuation, such as ongoing movie theater uncertainty. But the main reason is the persistently high-interest rate environment. Elevated interest rates put downward pressure on commercial property valuations and also make borrowing money to acquire properties more expensive.

However, this could also mean that EPR Properties is a bit of a coiled spring. Management sees a $100 billion investable market opportunity, and as cost of capital improves, it could create a dramatically stronger growth environment for this REIT.