Not much is working in 2022. After nearly two full years of bubbly bull market conditions, investors are rediscovering how truly miserable a bear market can be to live through. And that could bode well for my pick in this year’s Best Stocks for 2022 contest, EPR Properties (NYSE:EPR) stock.

There’s no “secret” to getting through a bear market intact, but there are things you can do to stack the odds in your favor. Avoiding crowded trades certainly helps. Buying stocks that were under-owned and mostly under the radar before the bear market started means that there are fewer potential sellers to drive the price down. A reasonably priced and a solid dividend also help, of course. When growth starts looking iffy, a safe dividend can provide a critical lifeline.

Well, that is where EPR stock comes in.

So, with all of that in mind, let’s dive in and take a closer look at EPR Properties.

As an entertainment real estate investment trust (REIT), EPR Properties is the quintessential post-pandemic play. It’s landlord to some of the sectors hit hardest by pandemic-related lockdowns, such as movie theaters, “eat and play” facilities like Top Golf driving ranges and even ski resorts.

During the pandemic, we bought a lot of “stuff” off of Amazon (NASDAQ:AMZN) and depended heavily on streaming services and other forms of stay-at-home entertainment. That trade has long since run its course, and Americans are making up for the lost time by spending their money on experiences with friends, family and coworkers. In turn, EPR stock is a direct play on this trend.

For the two decades leading into the pandemic, dollars spent on leisure experiences rose consistently year after year with only very modest pauses during recessions. Of course, spending fell off a cliff in 2020 and has yet to fully recover. This means that EPR Properties and its experience-based tenants still have a long runway of growth in front of them.

Overall, EPR stock has thus far managed to avoid getting slaughtered this year. Year-to-date (YTD), shares are down about 1%. Adding back the $1.33 per share in dividends earned through the end of May gets us close to breakeven.

Clearly, we’re not investing to tread water, and breaking even isn’t good enough. We need to actually make money in order to make this exercise worthwhile. But considering the S&P 500 was recently down as much as 23%, breaking even in a year like this is just fine.

We’ll see what the market gives us in the second half. But regardless, EPR Properties remains a very worthy destination for fresh capital.

A Dividend Beast

At current prices, the shares yield a whopping 7%. And importantly, after a rough pandemic experience that forced EPR to temporarily eliminate its dividend, the REIT is stable enough to actually raise its payout again. In March, EPR raised its monthly dividend 10%. And if history is any guide, there is a lot more growth to come. Pre-pandemic, EPR’s dividend was just over 38 cents per month. The dividend would need to rise by nearly 40% just to get back to pre-pandemic levels.

With that in mind, the safest dividend is the one that was just raised. No board of directors wants to deal with the fallout of cutting a dividend. It looks bad, and it shakes investor confidence. So, the only way they’re going to be comfortable raising the payout is if they believe there is a lot more cash coming in to replace what is being distributed.

If EPR stock’s share price never moved a cent from current levels, the 7% dividend would be enough to make the shares interesting. But yields like that don’t exist long in the wild. High yields bring new investors out of the woodwork, which in turn pushes the shares higher.

Bottom Line on EPR Stock

So, what sort of returns should we expect here?

Playing with the numbers, let’s say that EPR Properties manages to get its dividend back to pre-pandemic levels. Then, let’s further assume that the dividend yield falls to around 6%, which would be closer to the pre-pandemic normal for EPR stock. That would imply a share price of $76.60, or roughly 63% higher than its current price.  That’s just the share price appreciation, by the way. We’d also be collecting dividends along the way.

Is that realistic? I don’t see the shares getting there this year. But I do think they could get there in a few years, assuming no major business disruptions. The shares traded above $70 for most of 2019.

Therefore, EPR stock may or may not take the Best Stocks crown in 2022. Ultimately, that’s up to Wall Street. But if you’re looking for a stock well-positioned to beat the pants off the market in 2022, EPR stock is a solid choice.