EPRT Stock Recent News

Interest rates are now headed to lower levels. But REITs still offer up to 9% dividend yields. I highlight three of my favorite high yielding REITs for 2025.

EPRT leads the net lease sector due to its unique business model focusing on middle-market, sale-leaseback transactions, and proactive risk management. Essential Properties' low cost of equity, cheap debt, and low AFFO payout ratio enable it to maximize investment spreads and outperform competitors. Despite its low dividend yield, EPRT's total return is strong, driven by sale leasebacks to middle market tenants.

EPRT boasts top-tier business metrics, including 99.8% occupancy, 14.1-year average lease term, and strong tenant diversification, ensuring cash flow stability and predictability. Despite high interest rates, EPRT secured $582.7m in investments in Q1-Q2 2024, demonstrating robust investment activity with attractive cap rates. EPRT's safe financing structure features 100% fixed-rate debt, no maturities until 2027, and a $600m undrawn credit facility, limiting interest rate impact.

It would be fair to assume that usually when it comes to retirement investing, attractive yield and defense are two aspects that dominate investment decisions. If these two aspects have to be in place, there are not that many businesses or securities where to invest. In the previous or Part 1 article, I highlighted BXSL and EPD as two suitable products for defensive income investors.

Net lease REITs offer passive income with less cash flow volatility due to tenant responsibility for property expenses, making them attractive for long-term dividend growth. Capitalization rates, dividend yield, and AFFO yield are crucial metrics for evaluating net lease investments, with cap rates driven by property type, lease term, and tenant credit quality. EPRT and ADC lead the way in cost of equity, with EPRT focusing on high-yielding private equity-backed tenants and ADC on investment-grade national retailers.

For prudent retirement income seeking investors, securities that could be considered strategic fits should carry sound balance sheet, conservative cash flow profiles and at least above inflation-level growth prospects. In some situations, such strategic investments could also be tactically attractive in terms of producing strong returns over the near to medium-term. In this article, I present two investments that, in my opinion, should be seriously considered by defensive income investors.

High-yield investing is simpler and less speculative than many other approaches to investing. My approach centers on a simple method of determining if a stock is overrated or underrated and investing accordingly. I share two high-yield stocks that are very overrated right now and two high-yield stocks that are very underrated right now.

Essential Properties Realty Trust focuses on mid-market properties with smaller, non-investment grade tenants, offering higher growth potential and better cap rates despite increased risk. EPRT demonstrates strong fundamentals with low leverage, high diversification, and consistent FFO and dividend growth, despite being a relatively new company. EPRT's valuation is slightly higher than peers due to its growth prospects, lower debt levels, and healthy dividend payout.

The REIT market has been exhibiting positive momentum as the first interest rate cuts seem to have become very likely. This has pushed many REIT prices higher, especially for those names that embody specific fundamental strengths. In my portfolio, I hold two high quality REITs, which currently provide less attractive yields due to favorable share price movements.

Essential Properties Realty Trust operates in the e-commerce/recession-resilient property sector, with 96.4% ABR derived from triple-net leases. EPRT's Q2 2024 performance showed intense investment activity, a high occupancy rate, and solid AFFO per share growth. EPRT remains a strong player with positive investment spreads, occupancy rates, and an effective investment strategy.