Innovative Industrial Properties (NYSE: IIPR) and Front Yard Residential (NYSE:RESI) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.
Risk and Volatility
Innovative Industrial Properties has a beta of -0.81, indicating that its stock price is 181% less volatile than the S&P 500. Comparatively, Front Yard Residential has a beta of 1.69, indicating that its stock price is 69% more volatile than the S&P 500.
This table compares Innovative Industrial Properties and Front Yard Residential’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%|
|Front Yard Residential||-156.26%||-24.38%||-8.52%|
This is a breakdown of recent ratings and target prices for Innovative Industrial Properties and Front Yard Residential, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Innovative Industrial Properties||0||0||1||0||3.00|
|Front Yard Residential||0||0||2||0||3.00|
Innovative Industrial Properties presently has a consensus target price of $34.00, suggesting a potential downside of 3.68%. Front Yard Residential has a consensus target price of $16.00, suggesting a potential upside of 50.38%. Given Front Yard Residential’s higher probable upside, analysts clearly believe Front Yard Residential is more favorable than Innovative Industrial Properties.
Earnings & Valuation
This table compares Innovative Industrial Properties and Front Yard Residential’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Innovative Industrial Properties||$6.42 million||37.33||-$70,000.00||$0.67||52.69|
|Front Yard Residential||$94.17 million||6.04||-$185.45 million||N/A||N/A|
Innovative Industrial Properties has higher earnings, but lower revenue than Front Yard Residential.
Institutional and Insider Ownership
45.9% of Innovative Industrial Properties shares are owned by institutional investors. Comparatively, 71.9% of Front Yard Residential shares are owned by institutional investors. 6.2% of Innovative Industrial Properties shares are owned by insiders. Comparatively, 0.9% of Front Yard Residential shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Innovative Industrial Properties pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. Front Yard Residential pays an annual dividend of $0.60 per share and has a dividend yield of 5.6%. 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. Front Yard Residential has raised its dividend for 4 consecutive years. Front Yard Residential is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Front Yard Residential beats Innovative Industrial Properties on 8 of the 14 factors compared between the two stocks.
About Innovative Industrial Properties
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. has elected to be taxed as a real estate investment trust, commencing with the year ended December 31, 2017. Additional information is available at www.innovativeindustrialproperties.com.
About Front Yard Residential
Front Yard is an industry leader in providing quality, affordable rental homes to America's families. Our homes offer exceptional value in a variety of suburban communities which have easy accessibility to metropolitan areas. Front Yard's tenants enjoy the space and comfort that is unique to single-family housing, at reasonable prices. Our mission is to provide our tenants with houses they are proud to call home. Additional information is available at www.frontyardresidential.com.
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