What happened
Shares of Innovative Industrial Properties (IIPR +5.47%) returned 45% in 2018, according to data from S&P Global Market Intelligence.
The company -- a real estate investment trust (REIT) focused on facilities used for growing and processing cannabis -- owns 10 fully-leased properties in states where medical marijuana is legal.
Image source: Innovative Industrial Properties.
Innovative Industrial Properties stock was particularly strong last year given that the overall market was down. The S&P 500 and Nasdaq indexes had "returns" in negative territory, losing 4.4% and 3.9%, respectively. (In 2019, the company's shares are up 13.5% through Tuesday, Jan. 8.)
For folks like me, who like to see stock charts, here you go:
Data by YCharts.
So what
We can attribute the stock's good performance in 2018 to the company's strong financial results, along with investors pouring more money into cannabis stocks in general.
Here are the key metrics for the company's most recently reported quarter:
|
Metric |
Q3 2018 |
Q3 2017 |
Year-Over-Year Change |
|---|---|---|---|
|
Revenue | $3.93 million |
$1.56 million |
152% |
|
Operating income |
$1.57 million |
$295,000 | 432% |
|
Net income |
$1.49 million |
$334,000 | 346% |
|
Earnings per share |
$0.21 |
$0.09 | 133% |
|
Adjusted funds from operations (AFFO)* |
$2.58 million |
$724,000 | 256% |
|
AFFO per share |
$0.38 |
$0.21 | 81% |
Data source: Innovative Industrial Properties. *Adjusted funds from operations (AFFO) are the primary driver of dividend increases for REITs.
Now what
Innovative Industrial Properties is worth putting on your watchlist. Compared with buying shares of cannabis growers, it offers a way to invest in the fast-growing legal cannabis market that's less volatile -- and that should prove to be less risky.
