Critical Comparison: Innovative Industrial Properties (IIPR) versus FirstService (FSV)

Innovative Industrial Properties (NYSE: IIPR) and FirstService (NASDAQ:FSV) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, risk and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Innovative Industrial Properties 14.26% 1.42% 1.21%
FirstService 3.10% 26.98% 7.26%

Dividends

Innovative Industrial Properties pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. FirstService pays an annual dividend of $0.54 per share and has a dividend yield of 0.7%. Innovative Industrial Properties pays out 149.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FirstService pays out 26.6% of its earnings in the form of a dividend.

Insider and Institutional Ownership

45.9% of Innovative Industrial Properties shares are owned by institutional investors. Comparatively, 66.3% of FirstService shares are owned by institutional investors. 6.2% of Innovative Industrial Properties shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Innovative Industrial Properties and FirstService, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Innovative Industrial Properties 0 0 1 0 3.00
FirstService 0 4 0 0 2.00

Innovative Industrial Properties presently has a consensus target price of $34.00, indicating a potential downside of 4.20%. FirstService has a consensus target price of $76.00, indicating a potential upside of 1.95%. Given FirstService’s higher probable upside, analysts plainly believe FirstService is more favorable than Innovative Industrial Properties.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Innovative Industrial Properties $6.42 million 37.54 -$70,000.00 $0.67 52.97
FirstService $1.71 billion 1.51 $53.07 million $2.03 36.72

FirstService has higher revenue and earnings than Innovative Industrial Properties. FirstService 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.

Volatility and Risk

Innovative Industrial Properties has a beta of -0.88, indicating that its stock price is 188% less volatile than the S&P 500. Comparatively, FirstService has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Summary

FirstService beats Innovative Industrial Properties on 9 of the 16 factors compared between the two stocks.

Innovative Industrial Properties Company Profile

Innovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. Innovative Industrial Properties, Inc. intends to elect to be taxed as a real estate investment trust. Additional information is available at www.innovativeindustrialproperties.com.

FirstService Company Profile

FirstService Corporation provides property services to residential and commercial customers in the United States and Canada. The company operates through two segments, FirstService Residential and FirstService Brands. The FirstService Residential segment manages private residential communities, such as condominiums, co-operatives, homeowner associations, master-planned communities, active adult and lifestyle communities, and various other residential developments. This segment also offers a range of ancillary services, including on-site staffing for building engineering and maintenance, full-service swimming pool and amenity management, security and concierge/front desk, and landscaping; and financial services comprising cash management, other banking transaction-related services, and specialized property insurance brokerage. In addition, this segment provides energy management solutions and advisory services, and resale processing services. The FirstService Brands segment offers property services through 6 franchise networks; and company-owned locations, including 15 California Closets locations and 6 Paul Davis Restoration location. It offers residential and commercial restoration, painting, and floor coverings design and installation services; custom-designed and installed closet, and home storage solutions; home inspection services; exterior residential painting and window cleaning services; fire protection services; and heating, ventilation, and air conditioning services, as well as related services. This segment provides its services primarily under the Paul Davis Restoration, CertaPro Painters, California Closets, Pillar to Post Home Inspectors, Floor Coverings International, College Pro Painters, Century Fire Protection, and Service America brand names. FirstService Corporation was founded in 1988 and is headquartered in Toronto, Canada.

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