Interested In Innovative Industrial Properties Inc (NYSE:IIPR)’s Upcoming US$0.25 Dividend? You Have 2 Days Left
On the 16 July 2018, Innovative Industrial Properties Inc (NYSE:IIPR) will be paying shareholders an upcoming dividend amount of US$0.25 per share. However, investors must have bought the company’s stock before 28 June 2018 in order to qualify for the payment. That means you have only 2 days left! Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Innovative Industrial Properties’s latest financial data to analyse its dividend characteristics. See our latest analysis for Innovative Industrial Properties
5 questions I ask before picking a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is their annual yield among the top 25% of dividend payers?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has dividend per share amount increased over the past?
Does earnings amply cover its dividend payments?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does Innovative Industrial Properties fit our criteria?
Although REITs are expected to payout a high portion of the earnings, Innovative Industrial Properties currently pays out more than double its net income, meaning that dividend is predominantly funded by retained earnings. In the near future, analysts are predicting a more sensible payout ratio of 97.71%, leading to a dividend yield of around 4.92%. Furthermore, EPS should increase to $1.08, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. The reality is that it is too early to consider Innovative Industrial Properties as a dividend investment. Last year was the company’s first dividend payment, so it is certainly early days. The standard practice for reliable payers is to look for 10 or so years of track record.
Compared to its peers, Innovative Industrial Properties has a yield of 2.85%, which is on the low-side for REITs stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Innovative Industrial Properties for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three essential factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for IIPR’s future growth? Take a look at our free research report of analyst consensus for IIPR’s outlook.
Valuation: What is IIPR worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether IIPR is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
