150 Million Reasons to Buy This 6%-Yielding Dividend Stock

More often than not, higher-yielding dividend stocks have a higher risk profile. That's because they usually have high dividend payout ratios, putting the dividend at risk of reduction if their income falls. Because of that, EPR Properties (NYSE: EPR) 6%-yielding dividend would seem to be a higher risk payout. It's nearly double the dividend yield of the average real estate investment trust (REIT) and about four times higher than an S&P 500 index fund.

However, a closer look at the numbers suggests its big-time payout is on rock-solid ground. One number, in particular, stands out. The REIT noted in the second quarter that it expects to produce $150 million in post-dividend free cash flow this year. That number showcases the strength of the REIT's ability to sustain its current dividend, making it a great dividend stock to buy.

EPR Properties reported its second-quarter financial results earlier this month. The company's experiential real estate portfolio performed well in the period, generating $88.7 million, or $1.17 per share, of funds from operations as adjusted (FFOAA). That was more than enough to cover the REIT's monthly dividend payment of $0.825 per share for the quarter.

Source Fool.com