Head to Head Analysis: Innovative Industrial Properties (IIPR) versus Jernigan Capital (JCAP)

Jernigan Capital (NYSE: JCAP) and Innovative Industrial Properties (NYSE:IIPR) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.

Profitability

This table compares Jernigan Capital and Innovative Industrial Properties’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jernigan Capital 151.13% 7.44% 6.49%
Innovative Industrial Properties -108.39% -8.09% -7.47%

Insider and Institutional Ownership

69.5% of Jernigan Capital shares are owned by institutional investors. Comparatively, 5.4% of Innovative Industrial Properties shares are owned by institutional investors. 3.2% of Jernigan Capital shares are owned by insiders. Comparatively, 10.6% of Innovative Industrial Properties shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Jernigan Capital pays an annual dividend of $1.40 per share and has a dividend yield of 8.2%. Innovative Industrial Properties pays an annual dividend of $1.00 per share and has a dividend yield of 3.9%. Jernigan Capital pays out 95.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Innovative Industrial Properties pays out -33.1% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Jernigan Capital and Innovative Industrial Properties’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Jernigan Capital $6.53 million 37.43 $16.01 million $1.46 11.73
Innovative Industrial Properties $320,000.00 514.56 -$4.39 million ($3.02) -8.57

Jernigan Capital has higher revenue and earnings than Innovative Industrial Properties. Innovative Industrial Properties is trading at a lower price-to-earnings ratio than Jernigan Capital, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Jernigan Capital and Innovative Industrial Properties, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jernigan Capital 0 1 5 0 2.83
Innovative Industrial Properties 0 0 1 0 3.00

Jernigan Capital currently has a consensus price target of $24.40, suggesting a potential upside of 42.44%. Innovative Industrial Properties has a consensus price target of $34.00, suggesting a potential upside of 31.32%. Given Jernigan Capital’s higher probable upside, equities analysts clearly believe Jernigan Capital is more favorable than Innovative Industrial Properties.

Volatility and Risk

Jernigan Capital has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500. Comparatively, Innovative Industrial Properties has a beta of -4.52, meaning that its share price is 552% less volatile than the S&P 500.

Summary

Jernigan Capital beats Innovative Industrial Properties on 12 of the 16 factors compared between the two stocks.

Jernigan Capital Company Profile

Jernigan Capital, Inc. is a commercial real estate finance company. The Company provides capital to private developers, owners and operators of self-storage facilities. It intends to generate long-term returns on development property investments through a fixed rate of interest on its invested capital together with an interest in the positive cash flows of the self-storage development from operations, sales and/or refinancings. It generates cash flows from construction loans and operating property loans in the form of a fixed interest rate and origination fees. It originates various loans, such as bridge loans and credit lines. It has development property investments in Orlando, Atlanta, Tampa, Chicago and Miami. Its operating property loans are located in New Orleans, Newark, Nashville, Sacramento and Chicago. The Company conducts its investment activities through Jernigan Capital Operating Company, LLC. The Company is externally managed and advised by JCap Advisors, LLC.

Innovative Industrial Properties Company Profile

Innovative Industrial Properties, Inc. is focused on the acquisition, ownership and management of specialized industrial properties leased to state-licensed operators for their regulated medical-use cannabis facilities. The Company intends to acquire its properties through sale-leaseback transactions and third-party purchases. It is focused on leasing its properties on a triple-net lease basis, where the tenant is responsible for all aspects of and costs related to the property and its operation during the lease term, including maintenance, taxes and insurance. The Company intends to conduct business in an umbrella partnership real estate investment trust (UPREIT), structure through its operating partnership. The Company’s real estate investments will consist of primarily properties suitable for cultivation and production of medical-use cannabis.

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