The past year and a half or so hasn't exactly been a great environment to own experience-based real estate -- and EPR Properties (EPR -0.03%) hasn't exactly seen its business thrive. However, in this Fool Live video clip, recorded on Sept. 30, Fool.com contributor Matt Frankel, CFP, explains why this is a stock that needs to be on investors' radar as the COVID-19 pandemic gradually winds down.
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Matt Frankel: Ticker symbol is EPR. They are the only pure play on experiential properties. That was a terrible business to be in in 2020. Just to name one statistic, their biggest tenant is AMC. No one wanted to own an AMC property in 2020. Forty-six percent of their rental income came from theaters in 2020. They also own a substantial amount of golf attractions. Topgolf is one of their big tenants. They have some ski resorts. Vail Resorts is a big tenant of theirs. Water parks and things like that.
Now, their shareholders really need to thank the meme-stock traders they saved AMC -- was able to raise some fresh capital, really took bankruptcy off the table. They are in such better shape. They reinstated their dividend recently, long before people thought they would. They pay about a 6% dividend yield and it's well covered by what they earn.
One of the better dividend stocks I know, market cap's a little below $4 billion. The reason that's significant is because right now between cash on their balance sheet and a credit line, they have over $1.1 billion in available cash to go acquire more properties. Their plan is to really take advantage while the experiential market is a little depressed while COVID is still going on and really build up their portfolio, they see a $100 billion opportunity of properties they could acquire.
They specifically mentioned gaming like casino properties, cultural attractions like museums and zoos they want to add. They want to actively diversify away from that core movie theater holding. They feel like they really caught a break with how things have gone for AMC in the past six months or so. They really want to take advantage and diversify a little bit.
Another really strong performer, they went public in 1997. This is a company that got absolutely crushed in the early days of the pandemic. For them to have still doubled the S&P's returns since their 1997 IPO really just says how great of a job management's done at creating shareholder value. They've said they are ready to step on the gas and get back into full-on growth mode. I am really excited to see what they can do with that war chest of cash they have right now.
