It seems as if nothing is going to stop Innovative Industrial Properties (IIPR) from hitting triple-digit prices again. Since the stock plunged in March, along with the entire market, to $40 per share, IIPR has been showing tremendous strength. 

The momentum in IIPR continued this week after the company announced that its next quarterly common stock dividend will be $1.06 per share, up from the $1 per share it paid in April. This represents a 6% increase, as the company continues to generate more profits. Dividend growth is very attractive to income-oriented investors looking to grow their share positions over time. 

The new dividend will be paid out on July 15 to investors on record as of June 30. At current prices, the stock still offers a yield of over 4%, which is impressive.

IIPR has been so successful, and should continue to grow in the future, because it has found a profitable business model that works. 

IIPR is a REIT that targets ownership of specific properties in the cannabis sector. The company is required to pay out at least 90% of its net profits to shareholders in the form of dividends. This is the main reason why IIPR carries such a high yield. IIPR remains the only specialty cannabis REIT on the market which is another reason to like the company. Having no competition allows IIPR to dominate its niche, negotiate the best terms/purchase price, and acquire the best properties without the threat of competition. Its tenants include some of the most well known medical cannabis companies.

We especially like that IIPR targets the medical market as opposed to the recreational market due to the fact that the medical market tends to produce more stable and secure revenue streams. This will lower IIPR’s risk of potential default when it comes to its rented properties.

IIPR recently raised an additional $100 million dollars via an upsizing of an initial public offering of 1,348,389 shares of its common stock. The offering closed on May 29, 2020, and the additional capital will be used to fund future acquisitions. 

Overall we believe that as the cannabis sector continues to grow, IIPR should continue to dominate its niche.

IIPR is not only a growth play, but it appeals to income-oriented investors who otherwise might not invest in the cannabis sector for the stigma or risk that it carries. 

Therefore, we are fans of IIPR and believe that its stock will continue to move higher in the long-term.

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IIPR shares were trading at $97.33 per share on Friday afternoon, down $1.65 (-1.67%). Year-to-date, IIPR has gained 29.89%, versus a -3.57% 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...

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