Essential Properties Realty Trust: Strong Guidance and Dividend Hike Signal Confidence

Investors in Essential Properties Realty Trust received a dual dose of positive news as the company unveiled an optimistic financial roadmap for 2026 alongside a raise in its shareholder distribution. The single-tenant property-focused real estate investment trust (REIT) reinforced its growth trajectory with these announcements.

The REIT provided its fiscal 2026 guidance, projecting funds from operations (FFO) per share in the range of $1.98 to $2.04. This forward-looking statement builds upon its expectations for the current year, 2025, where it anticipates FFO per share between $1.87 and $1.89. This updated outlook follows a robust third-quarter 2025 performance, during which the company reported revenue of $144.93 million. This figure represents a significant 23.7% year-over-year increase and surpassed market analyst consensus estimates.

Dividend Increase Amid High Payout Ratio

In a concurrent move, Essential Properties declared an increase in its quarterly cash dividend. The payout will rise by approximately 3% to $0.31 per share, translating to an annualized distribution of $1.24. This enhancement directly rewards income-focused shareholders. However, analysts note the distribution is supported by a payout ratio of 96.77%, which may limit the potential for near-term future increases.

Should investors sell immediately? Or is it worth buying Essential Properties Realty?

Market Sentiment and Institutional Activity

The company's strategy and performance continue to garner support from research firms. The consensus rating among thirteen covering analysts remains a "Moderate Buy," with eleven issuing outright "Buy" recommendations. The average 12-month price target is approximately $35.54. Recent adjustments include:
* Scotiabank raising its price target to $34.00.
* Evercore ISI upgrading the stock to "Outperform" with a $36.00 target.

Essential Properties also released an updated investor presentation today, offering further context on its operations and strategy.

Trading at $31.02 at Tuesday's market open, the company commands a market capitalization of $6.15 billion and trades at a price-to-FFO multiple of 25.01. Ownership is heavily institutional, with approximately 96.98% of shares held by such entities. While Marshall Wace LLP reduced its position by 31.9% in Q2 2025, other major institutions like The Vanguard Group and Wellington Management expanded their stakes in earlier quarters of the year. The REIT's next key milestone will be the successful execution of its newly stated annual objectives.