Just as we thought the selling was over for Innovative Industrial Properties Inc. (IIPR), things got worse. Over the past 90 days, the stock tumbled over 30% and investors are wondering if now is the time to pick up some shares at these lower prices.
If you look at the year to date performance, IIPR’s stock is still up an impressive 80%, which has beat the market by a long shot. It was almost as if the market put IIPR in a category of its own, despite the weakness in the cannabis sector overall.
That was until the company issued 1.25 million shares right around the time when the stock was trading at an all-time high. As a result, the share price started to fall immediately in the days following the announcement.
Now although the company has raised over 100 million dollars and put that capital to work almost immediately, investors were concerned that further dilution is on the way.
However, we still think the best is yet to come for IIPR…
2019 has been a transitional year for IIPR and they have expanded their portfolio from a mere 11 properties to an astonishing 31 properties, with their most recent acquisition of Cresco Labs’ property in Illinois. As IIPR grows and expands they continue to diversify their revenue streams with each property.
One of the great things about IIPR is that the company pays a hefty dividend. At current levels, the company pays more than 4% which is more impressive than some consumer staples or even major utility companies in the United States. The more IIRP drops, the more the dividend increases, which should attract swarms of income investors looking for a high yielding stock with massive growth potential.
Another thing we like about the company is the fact that they are laser-focused on the medical marijuana market, only signing quality tenants on long-term, triple-net lease agreements.
Something investors also need to pay attention to is the potential for the SAFE banking act to pass, that currently sits with the Senate right now. This will allow cannabis companies to obtain traditional financing and insurance, something that might come in handy next time IIPR looks to raise additional capital if cannabis is not federally legal by then.
We see the recent drop in IIPR as a buying opportunity. Their focus on medical marijuana is beneficial, as it is more predictable and should generate more stable streams of income for the tenants that are occupying IIPR’s properties. That combined with the hefty dividend at current levels and the possibility of the SAFE banking act passing, makes IIPR an attractive cannabis stock to watch for the rest of 2019 and beyond.
IIPR shares were trading at $70.88 per share on Thursday morning, down $0.66 (-0.92%). Year-to-date, IIPR has gained 59.03%, versus a 21.83% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaron Missere
Aaron is an experienced investor who is also the CEO of Departures Capital. His primary focus is on the cannabis industry. He also hosts a weekly show on YouTube about marijuana stocks. Learn more about Aaron’s background, along with links to his most recent articles. More…
More Resources for the Stocks in this Article
View more information: https://stocknews.com/news/iipr-is-now-a-great-time-to-buy-innovative-industrial-properties/