Innovative Industrial Properties (NYSE: IIPR) is a real estate investment trust that operates exclusively with cannabis-related assets. It purchases properties from growers and producers, improves them, and leases them back to the cannabis companies to generate long-term income.
Although this is a highly niche business model, it’s also an incredibly effective one. The cannabis market is growing and many of the startups don’t have the knowledge or resources to improve their properties. By selling and then leasing the properties that they already occupy, they can benefit from Innovative Industrial Properties’ capital and regulatory knowledge. This company has proven to be extremely effective at navigating the complex legal framework of the cannabis industry.
90% of the company’s operating income is returned to investors with a cash dividend. This makes it incredibly appealing to those who want a long-term income stock. The current dividend yield of 2.88% provides a meaningful return for new investors. Company financials are strong. It increased revenue by 202.07% in the 2019 fiscal year, making it the fourth consecutive year of revenue growth.
Investors who want to avoid the highly volatile cannabis producer stocks can look to this option instead. As a real estate stock, it operates in familiar territory for many veteran investors. Its focus on cannabis allows it to leverage a market that is expected to be worth over $100 billion in the long term. It’s a stock to watch as the market recovers and worth consideration as a long term portfolio holding.
- 1 Year Price Growth: 53%
- YTD Price Growth: 34%
- 3 Month Price Growth: 58%
All information is based on current and historical market data, as well as publicly available financial data. As with any financial decision, your own research is important. Stock market outcomes can never be 100% accurately predicted. Familiarity with historical data, individual industries, and individual stocks is key to developing a robust portfolio. Note that stock prices can fluctuate rapidly during trading sessions.