Innovative Industrial Properties (NYSE:IIPR) Has Rewarded Shareholders With An Exceptional 339% Total Return On Their Investment
Innovative Industrial Properties, Inc. (NYSE:IIPR) shareholders might be concerned after seeing the share price drop 11% in the last quarter. But in three years the returns have been great. The share price marched upwards over that time, and is now 297% higher than it was. So the recent fall in the share price should be viewed in that context. The fundamental business performance will ultimately dictate whether the top is in, or if this is a stellar buying opportunity.
See our latest analysis for Innovative Industrial Properties
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Innovative Industrial Properties became profitable within the last three years. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. It might be well worthwhile taking a look at our free report on Innovative Industrial Properties's earnings, revenue and cash flow.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Innovative Industrial Properties the TSR over the last 3 years was 339%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
Innovative Industrial Properties shareholders are down 5.8% for the year (even including dividends) , falling short of the market return. Meanwhile, the broader market slid about 3.3%, likely weighing on the stock. Fortunately the longer term story is brighter, with total returns averaging about 64% per year over three years. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. It's always interesting to track share price performance over the longer term. But to understand Innovative Industrial Properties better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Innovative Industrial Properties , and understanding them should be part of your investment process.
Innovative Industrial Properties is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
