When the coronavirus pandemic-related shutdowns hit the economy, EPR Properties (EPR), a real estate investment trust (REIT), was possibly the hardest-hit stock in the U.S. It is a testament to the management team’s talents that EPR has again become an REIT that every income-focused investor should know.

Before the pandemic, EPR was an income machine. It typically carried a 7% yield, the dividend grew by 6% to 7% per year, and the company paid monthly dividends. The property portfolio consisted primarily of megaplex movie theaters, which accounted for about 50% of revenue. About 20% of revenue came from the charter and private schools owned by EPR. The remaining revenue came from other recreational properties, such as ski resorts and TopGolf facilities.

With the types of assets EPR owned, you can easily see how the shutdowns devastated its business. The company suspended dividend payments in May 2020. During this time, EPR worked with its lessees to make sure they could stay in business and resume lease payments when business conditions allowed.

Dividend payments resumed in July 2021 at 65% of the pre-pandemic rate.

According to a recent company presentation, movie theater revenue coverage of lease payments has returned to 2019 levels. Since the pandemic, EPR has expanded its investments into a broader range of experiential properties. Here are the types now owned by EPR:

And here is the current portfolio composition:

EPR Properties offers a unique investment opportunity. No other stock or REIT offers broad exposure to experiential real estate. The company is growth-focused and will continue to add properties.

As an investment, EPR continues to pay monthly dividends with a 7% current yield. The subsequent dividend increase should be announced in February, and I am looking for 3% to 5% dividend growth. That growth will continue into future years.