Can Innovative Industrial Properties Keep Running?

Innovative Industrial Properties (IIPR) has had a terrific year since it bottomed in March. The stock went from $40 per share to hit a 52-week high at $130.25. The stock is now up 170.1% since its low on March 18th. The company recently announced a third-quarter dividend of $1.17 per share. This is…

10% higher than its second-quarter dividend of $1.06, and a 50% increase from the third-quarter last year. This is the eighth dividend increase it’s the company went public in December 2016.

Dividend increases are indicative of a company with healthy cash flow. Its free cash flow as of the end of June was $24 million. The company ended the quarter with cash and cash equivalents of $373 million. While this was slightly down from last quarter, it is up 100.5% year-over-year. The company has low debt, with a debt to equity ratio of 0.1. It currently has no secured debt and only a 12% debt to total gross assets ratio, which includes their exchangeable senior notes.

IIPR generated revenues of $24.3 million this past quarter, a 183% increase year on year. The company’s funds from operations (FFO) for Q2 also increased 263% year over year. These growth figures are very encouraging for investors, especially since the company has a very healthy net profit margin of 55.7%. IIP’s stock performance has been driven by strong earnings and revenue growth, but the increased dividend payout adds another reason to consider the stock.

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