Entertainment companies were completely crushed by the global pandemic. Movie theaters, theme parks, concert venues, and many others have had to temporarily close their doors, rework around new COVID-19 regulations, or battle poor consumer attendance.
The past two years have been tough for EPR Properties (EPR -0.51%) , a real estate investment trust (REIT) that specializes in owning and renting residential real estate. Despite a recovery in demand for entertainment experiences in late 2021 and 2022, the company’s share price is 38% below pre-pandemic levels.
Its battered stock price makes it significantly undervalued for the growth opportunities ahead. Here’s a closer look at the company and why it’s a screaming buy right now.
Recovery is imminent
If 2022 has shown us anything, it’s that the demand for experiential activities is back. Top Gun: Maverick smashed the box office, selling out theaters across the U. See the article : Which women’s sport benefited most from Title IX?.S. Eat and play restaurants like Dave & Buster’s is making a huge comeback and travel to resorts, campgrounds and theme parks is on the rise. It is only a matter of time before EPR Properties’ tenants fully recover to pre-pandemic levels of operations.
EPR Properties’ portfolio is diversified across multiple industries, including dining and gaming, ski resorts, theme parks, gaming and casinos, cultural venues such as museums, sports centers and even private schools and early childhood centers. However, most of its portfolio is in cinemas. Almost half of its 355 properties are movie theaters, with its largest tenant, AMC Entertainment Holdings, accounting for about 14.9% of rental income.
While there are certainly still headwinds for its tenants, especially AMC, there is optimism that things will continue to improve.
It’s in a good financial position and recovering quickly
EPR Properties has done a good job of maintaining a healthy financial position despite the challenges of the pandemic. It has a multiple of 5. This may interest you : The Seahawks still have a high level of interest in Browns’ Baker Mayfield, who is also open to extending it.1 times earnings before interest, taxes, depreciation and amortization (EBITDA), which is about five times the REIT average. It has $328 million in cash and cash equivalents and zero debt until 2024, meaning tenants have a long time to recover.
Quarter by quarter, it is becoming abundantly clear that EPR Properties is moving towards recovery. The company was profitable for all of 2021, which was a great turnaround considering that it was operating at a net loss in 2020. In the second quarter, funds from operations (FFO), a key measure of REIT profitability, saw net loss jump more than 100% year-over-year. Fitch Ratings also upgraded the company and its unsecured debt to a stable outlook.
It’s priced well and pays dividends to boot
Most REITs trade at 15-20x FFO, with some of the largest and most popular REITs trading at over 20x. To see also : Books “meant to be” by local children’s authors. Currently, EPR Properties shares trade at about 11 times FFO, making it one of the cheapest REITs on the market today.
Its dividend yield is just over 6.5% today, and as an added bonus, the company pays monthly dividends. Plus, its current payout ratio of 75% is extremely healthy, meaning a dividend cut is unlikely even if things don’t improve dramatically.
EPR is down less than 1% this year, which is pretty impressive considering the market’s recent volatility. Investors who are bullish on the continued recovery of EPR leasing companies should use today’s low price as a buying opportunity.
Liz Brumer-Smith has no position in any of the stocks mentioned. The Motley Fool recommends Dave & Busters Entertainment and EPR Properties. The Motley Fool has a disclosure policy.
Liz Brumer-Smith has no position in any of the stocks mentioned. The Motley Fool recommends Dave & Busters Entertainment and EPR Properties. The Motley Fool has a disclosure policy.
What should I invest in right now?
Review: The best long-term investments for July 2022
- Growth stocks. In the world of stock investing, growth stocks are the Ferraris. …
- Equity funds. …
- Bond funds. …
- Dividend stocks. …
- Value shares. …
- Target date funds. …
- Real estate. …
- Small cap stocks.
Which share we can buy for long term?
| Supplies | Returns* as a percentage | Market capitalization (kr.) |
|---|---|---|
| Bajaj Finance Ltd. | 141.23 | 3,01,224 |
| Coforge Ltd. | 93.18 | 17,067 |
| Infosys Ltd. | 89.43 | 5,86,204 |
| Jubilant Foodworks Ltd. | 83.80 | 38,620 |
Can we buy stocks long term? Many market experts recommend holding stocks for the long term. The S&P 500 lost 47 in just 11 years from 1975 to 2022, making stock market performance quite volatile over shorter periods. 1 However, investors have historically experienced much greater success over the long term.
What percentage is the S&P down for 2022?
The Dow Jones industrial average fell 0.5 percent to 30,364.83. Three indexes ended Tuesday’s session with deep year-to-date losses, with the S&P 500 down 22 percent in 2022 and the Dow down 17 percent.
How many percent is the S&P down in 2022? Major indexes have seen big declines in 2022 as high inflation, rising interest rates and growing concerns about corporate profits and economic growth reduce investors’ appetite for risk. The blue-chip is down 18% this year, while the S&P 500 is down 23% and the tech-heavy Nasdaq Composite is down 32%.
What is the expected market return for 2022?
As of December 31, 2021, consensus estimates for 2021, 2022 and 2023 were $204.95, $223.46 and $245.01, respectively, according to Factset. As of February 10, 2022, they are $207.79, $224.89, and $247.53. There is no assurance that the Portfolio will achieve its investment objective.
How far will the S&P 500 fall?
The S&P 500’s 15.3 times price/earnings today could fall to 14 times in a recession, they said. While still not a baseline for Morgan Stanley, economists at the investment bank see a 35% chance of a recession by the first half of 2023.
How much has the stock market dropped in 2022?
The Dow Jones industrial average fell about 2.8 percent. All indices have fallen sharply in 2022 and there is no clear indication of when the markets might stabilize. Cryptocurrencies also swooned on Monday, with bitcoin losing more than 10 percent of its value.
How many stocks fell in 2022? The S&P 500 fell 0.9 percent on Thursday, bringing its 2022 loss to 20.6 percent. The tech-heavy Nasdaq, which fell 1.3 percent, is down nearly 30 percent this year, while a 0.8 percent drop in the Dow Jones industrial average brought its year-to-date decline close to 15 percent.
Why stock market is down in 2022?
While the company’s 2022 earnings are largely up, inflationary issues have hurt profit margins. High inflation erodes consumer confidence and can slow economic growth, depressing the shares of publicly traded companies. Rising interest rates.
Will the stock market recover in 2022?
But the major indexes are likely to end 2022 higher than they are now, as rock bottom stock prices begin to allow for a low buying opportunity that outweighs the risk of further declines, experts said. They predicted that once investors finally jumped the gun, the market would stabilize and start to recover.
