EPR Properties (EPR) hit a 38th new 52-week high of the past 12 months on Tuesday. Among mid-cap stocks, that’s the fifth most. 

I’ve been a long-time fan of the experiential REIT (real estate investment trust) in part because my grandfather ran Canada’s largest movie theater chain in the 1960s. As a young lad, I got exposed to the movie industry, and I’ve never lost my interest in the business. 

However, EPR, which stands for Entertainment Properties Trust, is much more than an owner of movie theaters; investors haven’t shown EPR much love in recent years--it’s up just 31% over the past five years compared to 87% for the S&P 500-- but it appears to be getting its mojo back. 

Up over 27% in 2025 and 37% over the past year, it’s miles ahead of the index, and despite the recent gains, I can see the momentum continuing.

Here’s why I feel this way. 

Diversification Is a Key Positive

As I mentioned in the introduction, it is more than just an owner of movie theaters; it diversifies its holdings away from movie theaters to both mitigate some of the risk associated with a downturn in movie-going and generate additional streams of revenue in the years ahead. 

By doing this, it ensures that it will continue to pay out a nice $3.54 in annual dividends, which currently yields 6.34%, despite the stock’s gains over the past year. This amounts to approximately a 70% payout of its AFFO (adjusted funds from operations) at the midpoint of its 2025 guidance of $5.08 a share.

It’s on a roll. The Barchart Technical Opinion assigns it a Strong Buy rating, with a 100% likelihood that it will continue its near-term trend. 

To push its stock higher over the mid- to long-term, it is reallocating the proceeds from selling 27 movie theaters over the past four years, along with some of its early childhood education centers--it sold three theater properties and 11 early childhood education centers in Q1 2025 for $78.9 million in proceeds, a net gain of $9.4 million--into other experiential properties with better potential for growth. 

Golf is an area where it is expanding. It now has 39 Topgolf locations, which generated $25.2 million in revenue for the REIT in the first quarter, representing 14.4% of the overall revenue, surpassing that of any other tenant, including AMC and Regal Cinemas. 

When EPR first invested in Topgolf’s locations, there were only three open. It now has over 100 in the U.S. and elsewhere. 

Another example in the golf space is the REIT's provision of $1.2 million to Evergreen Partners, an owner of a private golf club in Georgia, to acquire land, as well as $5.9 million in mortgage financing. It plans to enter into additional financing arrangements with Evergreen as the company expands its traditional ownership of private golf clubs. 

In the first quarter, EPR acquired Diggerland USA, the only construction-themed waterpark in America. The REIT paid $14.3 million for the New Jersey theme park. It is the second deal with the park operator, Innovative Attraction Management. 

It’s Not a Developer 

In an interview with Boyden, a leadership consultant, Chief Investment Officer Greg Zimmerman notes that the risk for the REIT is capped in the sense that it’s not a developer. 

“To be clear, we’re not a developer.  The tenant is going to get entitlements, they’re going to arrange construction, they are at risk for any over-runs.  They can think of us as a construction lender, as a typical bank would be,” Zimmerman said.

It has always been a triple-net lease owner of experiential properties, which means the tenant is responsible for all expenses related to the property's operation above and beyond the base rent. 

Tenants often prefer this type of lease because it gives them more control over the property's renovations and maintenance. REITs like them because they provide consistent income without all the extraneous items that tenants require. It’s a win/win. 

However, in recent years, in addition to property ownership, it has also ventured into real estate financing to reduce the number of properties on its balance sheet, while generating income for the REIT.  

In the first quarter, EPR’s mortgage and other financing income was $17.0 million, or 9.7% overall, up 200 basis points from $12.9 million a year earlier. 

In this instance, it’s acting more like a bank than a real estate owner, which should be of comfort to its shareholders. 

Why I Like EPR

The REIT currently generates 44% of its annualized adjusted EBITDAre (earnings before interest, taxes, depreciation and amortization for real estate) from theaters, early childhood education, and private schools. 

It is reducing its exposure to these areas and increasing it in other experiential properties, such as golf, wellness, and go-karting, with lower price points, that are geographically diverse and easily accessible by car. 

EPR’s $6.4 billion portfolio is diversified across 42 states and Canada, with 51 experienced operators running 276 locations. 

On three occasions since EPR went public in November 1997, the REIT’s stock has traded at or below $20 (October 2000, March 2009, and March/April 2020). If the share price ever drops to that level again, I’d load up the truck to buy, especially if you're interested in dividend income. 

I just don’t see experiential leisure disappearing anytime soon. There may be ebbs and flows where consumers choose to buy “things” rather than “experiences,” but that trend never lasts. 

That said, this is by no means a risk-free investment. Buy T-bills if that’s what you’re after. 

It doesn’t have too much in the way of options volume — its 30-day average is just 290 —but if you’re up for it, I like the Oct. 17 $60 call.

The maximum risk is $165 per call. Your breakeven is $61.65, based on a $56.40 share price, which is less than 10% higher than its current trading price. You can double your money by selling before expiration in 135 days if it appreciates by $4.72 (8.4%). 

Even at $61.65, the stock would trade at 21.9 times its 2026 EPS estimate of $2.82. Given the healthy yield, it wouldn’t be the worst idea to exercise your right to buy and hold for the next 5-10 years. 

In the long run, you’ll do well with EPR.