Innovative Industrial Properties: Valuation And Operational Features Convey Upside

Summary

  • A 100% net-lease agreement allows the REIT to bypass costly CapEx and vouchers in an inflationary environment.
  • Innovative Industrial Properties embedded growth remains high with a near 100% collectibles rate.
  • A dividend-discount model suggests the asset's undervalued. Relative valuation metrics support the claim.
  • An outstanding Sharpe Ratio implies risk/return is in check.
  • Despite all the positives, a portfolio analysis conveys potential counter-party & credit risk.

Commercial Growth of Cannabis on a Farm

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Our previous coverage of Innovative Industrial Properties (NYSE:IIPR) outlined the REIT's secular growth attributes, which we believe will carry the security above and beyond the broader asset class. In this analysis, we reiterate our buy rating as we've uncovered

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Data by YCharts

Earnings Presentation

Innovative Industrial Properties

Earnings Presentation

Innovative Industrial Properties

10-Q

Seeking Alpha; Innovative Industrial Properties

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Data by YCharts

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Data by YCharts

Tenants

Innovative Industrial Properties

DDM

Pearl Gray Equity and Research; Seeking Alpha

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Data by YCharts

Valuation

Seeking Alpha

Quantitative Risk

Seeking Alpha; YCharts

This article was written by

Cyclical Investing Made Easy

Quantitative Fund & Research Firm with a Qualitative Overlay.

Coverage: Global Stocks, ETFs, CEFs, and REITs.

Methods: Factor Analysis/Smart Beta, Neural Networks, Street Gossip, and Common Sense.

This is Independent Research and Not Financial Advice.



Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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