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Innovative Industrial Properties (IIPR)
NYSE:IIPR
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Innovative Industrial Properties
(NYSE:IIPR)
72Outperform
Positive Factors
Dividend Stability
IIPR maintained its quarterly dividend of $1.90 after increasing it by $0.08 in 1Q24.
Property Acquisition
IIPR acquired a property in Maryland comprising 23,000 square feet of industrial space for $5.6mm and executed a long-term lease for the entire property.
Negative Factors
Dividend Risk
The current quarterly dividend is at risk due to reduced earnings power and the high payout ratio.
Earnings Pressure
PharmaCann, IIPR’s largest tenant, being in default significantly affects the company's earnings power.
Tenant Defaults
Three tenants and one loan borrower were declared in default after failing to pay contractual obligations, which impacts 27% of IIPR's rental income.
Innovative Industrial Properties (IIPR) vs. S&P 500 (SPY)
Market Cap
$1.58B
Dividend Yield13.61%
Average Volume (3M)430.48K
Price to Earnings (P/E)10.1
Beta (1Y)1.20
Revenue Growth-0.32%
EPS Growth-4.24%
CountryUS
Employees22
SectorReal Estate
Sector Strength76
IndustryREIT - Industrial
Share Statistics
EPS (TTM)5.52
Shares Outstanding28,331,833
10 Day Avg. Volume241,990
30 Day Avg. Volume430,477
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.31
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit7.41
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$68.67Price Target Upside22.98% Upside
Rating ConsensusHold
Number of Analyst Covering7
Innovative Industrial Properties Business Overview & Revenue Model
Company DescriptionInnovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. Innovative Industrial Properties, Inc. has elected to be taxed as a real estate investment trust, commencing with the year ended December 31, 2017.
How the Company Makes MoneyInnovative Industrial Properties makes money primarily through leasing its properties to state-licensed medical-use cannabis operators. The company's revenue model is based on a triple-net lease structure, where tenants are responsible for property costs, taxes, insurance, and maintenance, ensuring steady income with minimal operational expenses for IIPR. The company strategically acquires properties from cannabis operators and leases them back, providing capital to the operators while securing long-term rental agreements. Additionally, IIPR may engage in property improvements, which are financed through increased rental agreements. This business model supports stable cash flow and growth as the cannabis industry expands. IIPR's success is closely tied to the regulatory environment for cannabis, its ability to identify and purchase valuable real estate, and the creditworthiness and operational success of its tenants.
Innovative Industrial Properties Key Performance Indicators (KPIs)
Any
Rentable Space
Measures the total square footage available for leasing, indicating potential revenue growth and capacity to expand tenant relationships.
Measures the total square footage available for leasing, indicating potential revenue growth and capacity to expand tenant relationships.
Data provided by:
Main Street Data
Main Street DataInnovative Industrial Properties Financial Statement Overview
Summary
Innovative Industrial Properties exhibits strong financial health with consistent revenue growth, robust profitability, and a strong balance sheet. The company has no debt, maintains a high equity ratio, and shows impressive return on equity. However, revenue trends and cash flow fluctuations need monitoring.Income Statement
Innovative Industrial Properties has shown consistent revenue growth over the years, with a significant leap from 2020 to 2021. The gross profit margin remains robust, indicating efficient cost management. The net profit margin is high, reflecting strong profitability, although there was a slight decrease in revenue from 2023 to 2024. EBIT and EBITDA margins are also healthy, supporting operational efficiency and profitability.85
Very Positive
Balance Sheet
The company maintains a strong balance sheet with no debt in 2024, reflecting a conservative financial strategy and high financial stability. The equity ratio is substantial, indicating a strong equity base relative to total assets. Return on equity is impressive, showcasing the company's ability to generate profits from its equity base.90
Very Positive
Cash Flow
Operating cash flow has been consistently strong, supporting the company's ability to maintain operations and fund growth. Free cash flow has shown improvement since 2022, but fluctuations in investing and financing cash flows suggest strategic investments and capital management. The operating cash flow to net income ratio is favorable, indicating effective cash conversion.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 308.52M | 309.51M | 276.36M | 204.55M | 116.90M | Gross Profit |
| 280.05M | 284.61M | 265.84M | 200.11M | 111.94M | EBIT |
| 168.34M | 174.59M | 169.62M | 135.37M | 69.74M | EBITDA |
| 248.72M | 248.88M | 230.92M | 177.15M | 97.76M | Net Income Common Stockholders |
| 159.86M | 165.59M | 154.39M | 113.99M | 65.73M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 146.25M | 140.25M | 87.12M | 81.10M | 126.01M | Total Assets |
| 2.38B | 2.39B | 2.41B | 2.08B | 1.77B | Total Debt |
| 297.87M | 300.88M | 301.50M | 326.09M | 137.75M | Net Debt |
| 151.62M | 160.63M | 214.37M | 245.00M | 11.74M | Total Liabilities |
| 441.99M | 438.12M | 452.94M | 472.90M | 243.11M | Stockholders Equity |
| 1.94B | 1.95B | 1.96B | 1.61B | 1.52B |
| Cash Flow | Free Cash Flow | |||
| 258.45M | 255.54M | -139.75M | -185.79M | -419.01M | Operating Cash Flow |
| 258.45M | 255.54M | 234.13M | 188.75M | 110.81M | Investing Cash Flow |
| -56.00M | -6.79M | -396.20M | -384.09M | -1.03B | Financing Cash Flow |
| -197.90M | -195.63M | 164.22M | 155.76M | 924.99M |
Innovative Industrial Properties Technical Analysis
Negative
55.84
Price Trends
60.00
Negative
66.72
Negative
90.64
Negative
Market Momentum
-1.26
Negative
52.40
Neutral
91.96
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IIPR, the sentiment is Negative. The current price of 55.84 is above the 20-day moving average (MA) of 52.06, below the 50-day MA of 60.00, and below the 200-day MA of 90.64, indicating a neutral trend. The MACD of -1.26 indicates Negative momentum. The RSI at 52.40 is Neutral, neither overbought nor oversold. The STOCH value of 91.96 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IIPR.
Innovative Industrial Properties Risk Analysis
Innovative Industrial Properties disclosed 74 risk factors in its most recent earnings report. Innovative Industrial Properties reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Innovative Industrial Properties Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $706.69M | 5.04 | 26.05% | 6.25% | -0.75% | 1514.44% | |
73 Outperform | $6.46B | 25.58 | 7.15% | 4.38% | 8.81% | 33.30% | |
72 Outperform | $1.58B | 10.11 | 8.20% | 13.61% | -0.32% | -4.24% | |
69 Neutral | $8.12B | 27.87 | 3.35% | 4.91% | 18.02% | 12.12% | |
64 Neutral | $2.41B | 62.64 | 2.98% | 6.50% | 5.27% | 58.15% | |
60 Neutral | $2.79B | 11.37 | 0.20% | 8519.74% | 6.07% | -14.95% | |
52 Neutral | $203.06M | ― | -15.86% | 1.30% | 0.55% | 12.36% |
* Real Estate Sector Average
Performance Comparison
IIPR
Innovative Industrial Properties
55.84
-42.73
-43.35%
STAG
Stag Industrial
33.87
0.48
1.44%
LXP
LXP Industrial Trust
8.15
-0.03
-0.37%
REXR
Rexford Industrial Realty
34.30
-8.29
-19.46%
PLYM
Plymouth Industrial Reit
15.35
-4.13
-21.20%
ILPT
Industrial Logistics Properties
3.07
-1.11
-26.56%
Innovative Industrial Properties Earnings Call Summary
Earnings Call Date:Feb 19, 2025
(Q4-2024)
| % Change Since: -21.62%|
Next Earnings Date:May 07, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company that is effectively managing its operations and investments despite facing industry-wide challenges. While the company has shown strong financial performance and strategic growth, there are notable concerns regarding tenant stability and regulatory uncertainties. The sentiment leans towards cautious optimism due to strong liquidity and strategic positioning, but tenant and market challenges cannot be overlooked.Q4-2024 Updates
Positive Updates
Strong Cash Flow and Dividends
Generated over $255 million of cash flow from operations and returned over $210 million to shareholders through dividends, continuing the track record of increasing annual dividends since inception in 2016.
Strategic Investments and Leasing
Deployed over $70 million in capital to acquire two properties and executed new leases at six properties, representing 530,000 square feet, or 6% of the total portfolio.
Robust Liquidity Position
Total available liquidity exceeded $235 million, with a strong balance sheet and low leverage at 11% debt to total gross assets.
Industry Growth Projections
Cannabis sales are projected to increase approximately 10% in 2025 after an estimated 9.8% growth in 2024, with total US cannabis sales of $32.4 billion.
Positive Resolutions and Management Moves
Achieved a comprehensive resolution with PharmaCann’s default, including recommencement of rent payments on nine of eleven leases. Also promoted two members to Senior Vice President positions.
Negative Updates
Revenue Decline and Tenant Issues
Total revenues decreased slightly to $308.5 million from $309.5 million in 2023, driven by tenant issues including partial payment of rent and the necessity to apply $5.7 million of security deposits for rent.
Challenges with Tenant Defaults
PharmaCann’s default required resolution, which included a negative quarterly impact to rent and highlighted broader tenant risks, especially with debt maturities approaching in 2026.
Regulatory and Market Uncertainty
Continued challenges from the illicit and gray markets, with the illicit market estimated to be more than two and a half times the size of the regulated market. Regulatory reform and rescheduling efforts remain uncertain.
Company Guidance
During the Fourth Quarter 2024 Earnings Call, Innovative Industrial Properties Inc. provided detailed guidance on various financial metrics and strategic initiatives. The company reported generating over $255 million in cash flow from operations and distributed more than $210 million to shareholders through dividends. They deployed over $70 million in capital for property acquisitions and improvements, and executed new leases covering 530,000 square feet, representing 6% of their portfolio. Total revenues for the year were $308.5 million, with an AFFO of $256.1 million. Their credit facility was upsized to $87.5 million, enhancing liquidity, which exceeded $235 million by year-end. The company's debt to total gross assets ratio was notably low at 11%, reflecting a strong balance sheet. The management expressed optimism about navigating industry headwinds and highlighted growth prospects within the regulated cannabis industry, projecting a 10% increase in sales for 2025.Innovative Industrial Properties Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
Innovative Industrial Properties Reports Strong 2024 Financials
Positive
Feb 20, 2025
On February 19, 2025, Innovative Industrial Properties announced its financial results for the fourth quarter and full-year 2024, with revenues totaling $308.5 million and an increase in its common stock dividends. The company has strengthened its financial position by enhancing its credit facility and expanding its property portfolio to 109 properties across 19 states, reflecting a strategic focus on growth in the cannabis real estate sector.
Executive/Board Changes
Innovative Industrial Properties Announces Board Member Retirements
Neutral
Feb 11, 2025
David Stecher and Mary Curran, members of the Board of Directors for Innovative Industrial Properties, announced they will retire and not seek re-election at the company’s 2025 annual shareholders meeting. Their decisions are not due to any disagreements with the company, and CEO Paul Smithers expressed gratitude for their contributions.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.