EPR PROPERTIES (EPR)

AFFO per share grew 15.3% year-over-year in Q2 2026 ($1.43 vs. $1.24) and 11.1% for the six-month period ($2.71 vs. $2.44), demonstrating steady growth. Payout coverage stands at 1.59x, indicating payout is approximately 63% of AFFO—well below the 75% threshold. The annualized dividend increased 5.1% year-over-year to $3.72 per share, and 2026 FFOAA guidance was raised mid-year, reflecting confidence in continued earnings growth and dividend sustainability. While the company shows strong fundamentals and consistent dividend growth, the data does not explicitly confirm a 10+ year dividend growth streak, preventing a perfect score.

EPR's net debt/EBITDA of 5.3x sits at the upper boundary of the 5x threshold for a score of 5, placing it solidly in the 4-5 range. Payout coverage of 1.59x is below the 4x benchmark but acceptable for a REIT; however, this represents a material weakness relative to the rubric's 5-point anchor. The company demonstrates financial flexibility through a newly executed $1.6 billion credit agreement with extended maturities (revolving facility to July 2030, term loan to January 2032) and reduced interest rates, indicating manageable debt structure. With 99% occupancy and strong FFO growth (12.7% YoY), operational performance supports the balance sheet. The leverage metric is not materially elevated, though coverage could be stronger; the company sits between the 5-point and 3-point anchors, closer to 5 given the improved credit facility and operational strength.

EPR demonstrates strong operating performance with 99% occupancy across its wholly-owned portfolio, meeting the 95%+ threshold for stability. FFOAA per share grew 12.7% year-over-year in Q2 2026 and 10.2% for the first half, with full-year 2026 guidance increased to $5.41–$5.57 (7.2% midpoint growth over 2025), indicating consistent positive momentum. The company successfully executed $440.8 million in Q2 investments including the Six Flags acquisition and other property acquisitions, demonstrating operational execution. However, the release does not explicitly disclose Same-Store NOI (SSNOI) growth or releasing spreads, which are key anchors for a score of 5; the strong FFO growth and high occupancy suggest solid underlying performance but fall short of the explicit 3%+ SSNOI consistency required for the highest rating.

EPR operates in experiential real estate (95% of $7.5B portfolio: theatres, attractions, eat & play, ski, fitness/wellness) facing secular headwinds from streaming and changing consumer behavior, though the Six Flags acquisition and attraction expansion show management pursuing growth. Portfolio is moderately diversified across 291 properties with 99% occupancy, but tenant credit quality is mixed—theatre operators face structural challenges while attractions show resilience. Assets are modern post-acquisition, but markets remain competitive. Net debt-to-EBITDA of 5.3x and payout coverage of 1.59x indicate moderate leverage. The sector is stable but not secular-tailwind, with average-to-above-average operational execution offsetting structural sector concerns.

EPR demonstrates mixed capital allocation discipline with concerning dilutive issuance patterns offsetting some positive operational execution. The company has $69.5 million in unsettled forward equity sales agreements (1.19 million shares) as of June 30, 2026, with additional $23.4 million entered during Q2 at $59.70/share—below the current $61.23 price, indicating dilutive equity raises. While FFO per share grew 12.7% and AFFO per share grew 15.3% year-over-year, and the company increased 2026 guidance with disciplined acquisition activity ($440.8M invested in Q2), the reliance on ATM equity offerings to fund growth alongside $1.6B in debt facilities suggests capital allocation relies on equity dilution rather than accretive-only issuance. Disclosure appears adequate but lacks evidence of meaningful insider ownership or a long track record of per-share growth without dilution.

Mechanical valuation (D-07): current ratio 10.7 vs 12-point own history, percentile rank 0.00.