We’re starting off our 2021 Top Picks with this marijuana REIT that just raised its quarterly dividend to $1.24 per share. That amounts to an annual dividend yield of 2.8%.
Innovative Industrial Properties, Inc. (IIPR)
From Cabot Marijuana Investor
Based on the recent action of this red-hot sector, it’s easy to conclude that there are no bargains in marijuana stocks today. The North American Marijuana Index is up 305% from its March low, while the average stock in my portfolio is up more than 400%. Of course, that was a deep pit they had to climb out of, but even relative to January, these stocks have been strong, with the Index up 29% YTD and my portfolio up 69%.
Even if they’re not cheap, however, there are still stocks that are not overbought, and that have great potential to grow as this dynamic young sector evolves, and one of them is my choice as we head into 2021. Innovative Industrial Properties is the leading landlord for the medical marijuana industry in the U.S., with 64 properties in 16 states, totaling 5.2 million square feet, that are 99.3% leased using triple-net leases.
Operating as a Real Estate Investment Trust (REIT), the company enables its tenants to use its capital to grow, and then distributes at least 90% of its taxable income to shareholders through quarterly dividends. Today, that amounts to an annual payout of $4.96 per share.
But we’re not in it for the yield, though that does provide some stability to the stock. We’re in it for the growth. In fact, I’ve had the stock in my portfolio in Cabot Marijuana Investor since late 2017, and we’ve seen good gains by the stock every year. This year, a couple of smaller competitors emerged, but Innovative is still King of the hill.
Timothy Lutts, Cabot Marijuana Investor, cabotwealth.com, 978-745-5532, December 8, 2020