Comparing Uniti Group (UNIT) & Innovative Industrial Properties (IIPR)

Uniti Group (NASDAQ: UNIT) and Innovative Industrial Properties (NYSE:IIPR) are both financials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and recommmendations for Uniti Group and Innovative Industrial Properties, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Uniti Group 0 3 4 0 2.57
Innovative Industrial Properties 0 0 1 0 3.00

Uniti Group presently has a consensus price target of $26.67, indicating a potential upside of 75.55%. Innovative Industrial Properties has a consensus price target of $34.00, indicating a potential upside of 31.32%. Given Uniti Group’s higher possible upside, analysts clearly believe Uniti Group is more favorable than Innovative Industrial Properties.

Dividends

Uniti Group pays an annual dividend of $2.40 per share and has a dividend yield of 15.5%. Innovative Industrial Properties pays an annual dividend of $1.00 per share and has a dividend yield of 3.9%. Uniti Group pays out -888.9% of its earnings in the form of a dividend. Innovative Industrial Properties pays out -158.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Uniti Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

69.1% of Uniti Group shares are held by institutional investors. Comparatively, 9.6% of Innovative Industrial Properties shares are held by institutional investors. 0.4% of Uniti Group shares are held by company insiders. Comparatively, 10.6% of Innovative Industrial Properties shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Uniti Group and Innovative Industrial Properties’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Uniti Group $770.41 million 3.53 -$210,000.00 ($0.27) -57.37
Innovative Industrial Properties $320,000.00 514.56 -$4.39 million ($0.63) -41.10

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

Profitability

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

Net Margins Return on Equity Return on Assets
Uniti Group -4.32% N/A -1.01%
Innovative Industrial Properties -108.39% -8.09% -7.47%

Summary

Uniti Group beats Innovative Industrial Properties on 11 of the 15 factors compared between the two stocks.

Uniti Group Company Profile

Uniti Group Inc., formerly Communications Sales & Leasing, Inc., is an internally managed real estate investment trust engaged in the acquisition and construction of infrastructure in the communications industry. The Company focuses on acquiring and constructing fiber optic broadband networks, wireless communications towers, copper and coaxial broadband networks and data centers. It operates in four segments: Leasing, Fiber Infrastructure, Towers and Consumer Competitive Local Exchange Carrier (Consumer CLEC). The Leasing segment includes Uniti Leasing. The Fiber Infrastructure segment includes Uniti Fiber business. The Towers segment includes Uniti Towers and its ground lease investments. The Consumer CLEC segment includes Talk America. As of July 3, 2017, the Company and its subsidiaries owned approximately 88,100 fiber network route miles, representing approximately 4.8 million fiber strand miles and approximately 231,900 route miles of copper cable lines across 32 states.

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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