Innovative Industrial Properties
“I’m sure the idea of investing in marijuana for dividend income sounds absolutely absurd, especially given the problems experienced by the industry throughout North America in 2019. However, cannabis real estate investment trust (REIT) Innovative Industrial Properties (NYSE:IIPR) has shown that it’s not your typical pot stock.
As a cannabis-focused REIT, Innovative Industrial Properties acquires medical marijuana producing and processing facilities across the United States, then leases these assets out for an extended period of time. It’s also able to incorporate a modest organic growth component by passing along rental increases each year and charging a property management fee to its tenants that’s based on this rising rental base. This year alone, IIP has seen its property count nearly quadruple from 11 to 42, with a weighted-average remaining lease length of 15.5 years and an average return on invested capital of 13.6%. In short, this company should see a complete return on its investments in a little over five years.
Best of all, with U.S. pot stocks having limited access to capital, the sale-leaseback agreements that IIP provides make it a shoo-in to build its portfolio throughout 2020. Having recently increased its payout to $1 per quarter, Innovative Industrial Properties is now paying out a 5.6% yield and has grown its payout by 567% in just the past nine quarters. It’s not your average dividend stock, and income investors should really give it a look.”