Why Marijuana Dividend Inventory Innovative Industrial (IIPR) fell 18% in October



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What happened

Actions of Innovative industrial properties (NYSE: IIPR) decreased by 17.7% in October, according to data from S & P Global Market Intelligence. The return on the stock was also negative by 17.7%, with no dividend paid during the month.

The San Diego-based company is a real estate investment trust (REIT) specializing in properties used for growing and processing cannabis in US states where marijuana for medical purposes is legal.

For the context, the S & P 500 The index posted a return of 2.2% last month.

Interior of a large cannabis greenhouse

Image Source: Innovative Industrial Properties.

So what

We can attribute the poor performance of Innovative Industrial inventories in October to the continued weakness of the entire cannabis industry rather than to company-specific events. Last month, for example, the shares of Canada's leading cannabis producers Cover growth, Aurora Cannabis, and Cronos decreased by 13%, 18.2% and 9.3%, respectively.

While Innovative Industrial inventories have been reduced in recent months due to the weakness of their sector, the fast-growing company continues to post excellent quarterly figures. In the second quarter, its turnover grew by 155% over the previous fiscal year, to reach 8.28 million dollars, its earnings per share (EPS) jumped 76%, for s & D Set at $ 0.30, and its adjusted working capital – a key profitability measure for REITs – jumped 90% to $ 0.59.

Now what

After its recent strong downturn, Innovative Industrial Properties is trading at 23.7 times its futures earnings, so it looks very attractive. This is a convincing valuation for a company with its growth momentum.

Investors should soon receive important information, the company to publish its third quarter results on Wednesday, November 6, after the market closes.

Wall Street is seeking EPS of $ 0.47 on revenue of $ 10.7 million, representing growth of 124% and 174%, respectively, over the previous year. Strong earnings growth is generally reflected in strong growth in cash flow from operations.

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Beth McKenna has no position in the mentioned actions. Motley Fool recommends innovative industrial properties. Motley Fool has a disclosure policy.

The views and opinions expressed in this document are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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