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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#4289
Positioning
Market Dominance
Finance, Insurance, And Real Estate
Real Estate
$1.5B
Paul E. Smithers
Innovative Industrial Properties, Inc. elected to be taxed as a real estate investment trust, commencing with the year ended December 31, 2017. Maryland corporation focused on the acquisition, ownership and management of specialized properties leased to experienced state-licensed operators.
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Dates updated upon official exchange announcement.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = IIPR ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$SII SPROTT INC. | 75 | 91 | 87 | 98 | - | - | 15.7% | 12.8% | 48.9% | 37.0% | 28.8% | 14.9% | 2.5% | 0.0x | $1.1B | VS | |
$PUK PRUDENTIAL PLC | 73 | 88 | 97 | 80 | - | - | 13.2% | 1.4% | 100.0% | 97.0% | 23.8% | 11.8% | 2.7% | 5.0x | $21.5B | VS | |
$NMR NOMURA HOLDINGS INC | 72 | 81 | 92 | 87 | - | - | 9.9% | 0.6% | 84.5% | 70.0% | 7.3% | 14.9% | 0.0% | 923.0x | $18.3B | VS | |
$PSLV Sprott Physical Silver Trust | 69 | 82 | 80 | 98 | - | - | 17.3% | 17.7% | 100.0% | 100.0% | 100.0% | 1643.8% | 0.0% | 0.0x | $5.0B | VS | |
$UFCS UNITED FIRE GROUP INC | 68 | 81 | 93 | 76 | 5.0x | 3.5x | 13.2% | 4.1% | 99.9% | 14.7% | 11.1% | 9.2% | 2.1% | 16.0x | $775M | VS | |
$SLF SUN LIFE FINANCIAL INC | 68 | 83 | 95 | 63 | - | - | 12.6% | 0.9% | 32.0% | 31.3% | 7.9% | -12.9% | 4.3% | 24.0x | $37.8B | VS | |
$CBOE Cboe Global Markets, Inc. | 68 | 75 | 63 | 77 | 21.3x | 15.7x | 24.0% | 13.7% | 41.7% | 32.4% | 26.4% | 8.2% | 1.1% | 30.0x | $25.7B | VS | |
$PHYS Sprott Physical Gold Trust | 67 | 64 | 82 | 91 | - | - | 22.5% | 22.8% | 101.8% | 100.0% | 100.0% | 138.9% | 0.0% | 0.0x | $8.4B | VS | |
$VTMX Vesta Real Estate Corporation, S.A.B. de C.V. | 67 | 69 | 77 | 80 | - | - | 8.8% | 5.8% | 98.7% | 75.7% | 88.5% | 17.6% | 4.3% | 34.0x | $2.2B | VS | |
$GLDM World Gold Trust | 66 | 54 | 85 | 92 | 11.3x | 11.3x | - | 27.1% | 100.0% | 98.9% | 459.9% | 333.4% | 0.0% | 0.0x | $43.7B | VS | |
$IIPR INNOVATIVE INDUSTRIAL PROPERTIES INC | 33 | 31 | 53 | 14 | 10.1x | 9.5x | 6.8% | 5.4% | 0.0% | 48.4% | 45.6% | -18.9% | 14.2% | 25.0x | $1.5B | ||
| SECTOR BENCH | - | - | - | - | - | 11.9x | 7.8x | 8.9% | 1.2% | 76.5% | 17.0% | 21.5% | 10.8% | 1.9% | 0.5x | - | REF |
INNOVATIVE INDUSTRIAL PROPERTIES INC (IIPR) receives a "Avoid" rating with a composite score of 33.1/100. It ranks #4289 out of 7,333 stocks in our coverage universe and carries a 1-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Paul E. Smithers
Chief Executive Officer
Labor Force
20
31
35
38
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for IIPR
Lagging peers — losers tend to keep underperforming
Fair valuation relative to peers
Weak fundamentals — higher risk of value trap
Average volatility — neutral timing signal
Aggressive spending — empire-building risk, dilutive growth
Below-average composite — caution warranted
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Relative valuation derived from Finance, Insurance, And Real Estate sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for IIPR.
View All RatingsConservative accounting — High cash conversion efficiency
Material decline in asset turnover efficiency detected
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 31 | 42 | -11DRAG |
| MOMENTUM | 14 | 7 | +7ALPHA |
| VALUATION | 53 | 73 | -20DRAG |
| INVESTMENT | 35 | 59 | -24DRAG |
| STABILITY | 38 | 31 | +7ALPHA |
| SHORT INT | 21 | 7 | +14ALPHA |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 7.7% vs WACC 8.5% (spread -0.9%)
GM 0% vs sector 77%, OM 48% vs sector 17%
Capital turnover 0.21x
Rev growth -19%, 8yr history
Interest coverage N/A, Net debt/EBITDA 10.3x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
Our quantitative model flags INNOVATIVE INDUSTRIAL PROPERTIES INC with an Avoid rating, assigning a composite score of 33.1/100 and 1 out of 5 stars. Ranked #4289 of 7,333 stocks, IIPR falls in the bottom tier across key factors. Historically, stocks with this profile have faced elevated risk of underperformance and capital loss.
IIPR's quality score of 31/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of 6.8% (sector avg: 8.9%), gross margins of 0.0% (sector avg: 76.5%), net margins of 45.6% (sector avg: 21.5%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
IIPR's value score of 53/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 10.12x, an EV/EBITDA of 9.54x, a P/B ratio of 0.69x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
INNOVATIVE INDUSTRIAL PROPERTIES INC's investment score of 35/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of -18.9% vs. a sector average of 10.8% and a return on assets of 5.4% (sector: 1.2%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
INNOVATIVE INDUSTRIAL PROPERTIES INC is experiencing notably weak momentum with a score of just 14/100. The stock has underperformed its peers and is trending below major moving averages. Revenue growth stands at -18.9% year-over-year, while a beta of 0.74 reflects its sensitivity to broader market moves. While deep momentum weakness can occasionally present value opportunities, it often reflects deteriorating fundamentals or structural headwinds that may persist.
IIPR's stability score of 38/100 signals elevated volatility and/or leverage concerns. Key stability metrics include a beta of 0.74 and a debt-to-equity ratio of 25.00x (sector avg: 0.5x). Investors should be prepared for wider-than-average price swings and consider position sizing accordingly to manage portfolio risk.
INNOVATIVE INDUSTRIAL PROPERTIES INC's short interest score of 21/100 reveals significant bearish positioning, suggesting institutional investors are actively betting against the stock. Specific risk factors include elevated leverage (D/E: 25.00x), small-cap liquidity risk. At $1.5B (small-cap), IIPR carries meaningful risk and is best suited for investors with high risk tolerance who have thoroughly evaluated the bear thesis.
INNOVATIVE INDUSTRIAL PROPERTIES INC offers an attractive dividend yield of 14.2%, placing it among the higher-yielding stocks in its peer group. This compares to a sector average dividend yield of 1.9%. A yield this high can provide meaningful income, but investors should verify the payout is sustainable by examining the payout ratio, free cash flow coverage, and any history of dividend cuts.
INNOVATIVE INDUSTRIAL PROPERTIES INC is a small-cap company in the Finance, Insurance, And Real Estate sector, ranked #0 of 50 in its sector (100th percentile) and #4289 of 7,333 overall (42nd percentile). Key comparisons include ROE of 6.8% trailing the 8.9% sector median and operating margins of 48.4% above the 17.0% sector average. This top-quartile standing reflects exceptional competitive strength relative to Finance, Insurance, And Real Estate peers.
While IIPR currently exhibits a AVOID profile, superior opportunities exist within the FINANCE, INSURANCE, AND REAL ESTATE sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Finance, Insurance, And Real Estate Alpha →Quant Factor Profile
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Improvement in Momentum (14) would have the largest impact on the composite score.
EV/EBITDA 23% ABOVE SECTOR MEDIAN
ROE 24% BELOW SECTOR MEDIAN
Gross Margin 100% BELOW SECTOR MEDIAN
AUDIT DATA AS OF SEP 30, 2025 (Q2 FY2025)
We rate INNOVATIVE INDUSTRIAL PROPERTIES INC (IIPR) as Avoid with a composite score of 33.1/100 at a current price of $51.13. The stock falls in the bottom quintile of our universe across key quantitative factors, and the multi-factor weakness suggests a high probability of continued underperformance.
The rating is primarily driven by strength in value (53th percentile) and stability (38th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (14th percentile) and quality (31th percentile) tempers our overall conviction. We assign a No Moat rating (28/100), Low uncertainty, and Standard capital allocation.
Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
INNOVATIVE INDUSTRIAL PROPERTIES INC holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 33.1/100 places it at rank #4289 in our full 7,333-stock universe. At $1.5B in market capitalization, INNOVATIVE INDUSTRIAL PROPERTIES INC is a small-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue contraction of -19% combined with momentum at the 14th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.
The margin cascade tells an important story: gross margins of 0% (-76.5pp vs sector) narrow to operating margins of 48% (+31.4pp vs sector) and net margins of 45.6%, yielding a gross-to-net conversion rate of N/A%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.
At a current price of $51.13, INNOVATIVE INDUSTRIAL PROPERTIES INC is trading near fair value based on current fundamentals. Our value factor score of 53/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at a P/E of 10.1x (roughly in line with the sector median of 11.9x), EV/EBITDA of 9.5x (at a premium), P/B of 0.7x, P/S of 4.6x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.
A conservative balance sheet (25% D/E) provides financial flexibility for acquisitions, buybacks, or weathering economic downturns without dilution.
A 14.18% dividend yield provides income while you wait, and dividends historically account for a significant portion of total equity returns.
The Avoid rating (composite 33.1/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
Revenue decline of -19% signals business deterioration — declining revenues make it difficult to grow into the current valuation and often precede further negative revisions.
Weak momentum (14th percentile) suggests institutional selling pressure and unfavorable technical dynamics that may persist.
We assign a Low uncertainty rating to INNOVATIVE INDUSTRIAL PROPERTIES INC. The company exhibits strong financial stability with a beta of 0.74, conservative leverage (25% D/E), and a stability factor in the 38th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.
Specific risk factors that inform our assessment include: below-average price stability (38th percentile); weak quality scores (31th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 38th percentile and quality factor at the 31th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: conservative leverage (25% D/E) limits balance sheet risk; a 14.18% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate INNOVATIVE INDUSTRIAL PROPERTIES INC's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 6.8%, and the balance sheet is managed within acceptable parameters (D/E: 25%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; INNOVATIVE INDUSTRIAL PROPERTIES INC falls short on at least one dimension.
There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 14.18% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.
In summary, INNOVATIVE INDUSTRIAL PROPERTIES INC receives a Avoid rating with a composite score of 33.1/100 (rank #4289 of 7,333). Our quantitative framework assigns a No Moat (28/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 34/100.
Our analysis does not support a constructive view on INNOVATIVE INDUSTRIAL PROPERTIES INC at this time. The combination of limited competitive advantages, low uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We do not assign INNOVATIVE INDUSTRIAL PROPERTIES INC a meaningful economic moat, scoring 28/100 on our composite assessment. The ROIC-WACC spread of -0.9% is the primary signal of economic value creation. Current fundamentals do not demonstrate the kind of durable competitive advantages — such as superior returns on invested capital, margin superiority, or reinvestment efficiency — that would protect the company from competitive erosion over the long term. The highest-scoring pillar, growth durability, reached only 12.3/20.
The strongest moat sources are growth durability (12.3/20) and margin superiority (9.4/20). Rev growth -19%, 8yr history. GM 0% vs sector 77%, OM 48% vs sector 17%. These pillars form the core of INNOVATIVE INDUSTRIAL PROPERTIES INC's competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include reinvestment efficiency (0/20) and financial resilience (0/20). Capital turnover 0.21x. Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect INNOVATIVE INDUSTRIAL PROPERTIES INC's moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include operating margins of 48% reflecting effective cost management, declining revenues (-19%) that pressure the earnings outlook. The margin cascade from 0% gross to 48% operating to 45.6% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality raises some durability concerns, with the quality factor at the 31th percentile.
The margin profile shows gross margins of 0%, operating margins of 48%, net margins of 45.6%. Return metrics include ROE of 6.8% and ROA of 5.4%. Relative to the Finance, Insurance, And Real Estate sector, gross margins are 76.5 percentage points below the sector median of 77%, and ROE of 6.8% compares to a sector median of 8.9%.
The balance sheet reflects a conservatively managed balance sheet with D/E of 25%, a dividend yield of 14.18%, revenue growth of -19%. The sector median D/E is 0%, putting INNOVATIVE INDUSTRIAL PROPERTIES INC at higher leverage than the typical peer. The combination of low leverage and healthy profitability provides significant financial resilience and strategic optionality.
Below-average quality (31th percentile) raises durability concerns about the fundamental profile and increases the risk of negative earnings surprises.
Above 50MA
37.18%
Net New Highs
+51081
Innovative Industrial Properties, Inc. reported that it would release its Q4 2025 results after the market close at 4:00 PM US Eastern Time on February 23, 2026, amid ongoing pressure on revenue and profitability expectations. At the same time, the company’s US$270 million investment into private life sciences REIT IQHQ highlights a move to rebalance its portfolio beyond cannabis properties. We’ll now examine how this upcoming earnings release and IQHQ diversification push may reshape...
Innovative Industrial Properties, Inc. (IIPR) is facing a securities fraud lawsuit alleging the company made false and misleading statements about its rent and property management fees, hindering its ability to maintain revenue growth and FFO. Investors who purchased the company's securities during the class period are encouraged to contact the Schall Law Firm before the deadline.
Innovative Industrial Properties (IIPR) is a unique cannabis-focused REIT that offers a high-yield dividend. Despite a recent tenant default, the company's future looks bright as marijuana legalization gains momentum in the U.S. The article suggests IIPR could outperform the broader market due to its attractive valuation and growth potential.
Innovative Industrial Properties (IIPR), a cannabis-focused REIT, faces significant headwinds with stock down 79% over five years. The company experienced declining revenue and tenant defaults in Q3, while maintaining an unsustainable 111% dividend-to-AFFO payout ratio that could lead to dividend cuts. However, potential cannabis reclassification to Schedule III and diversification into life sciences through a $270 million IQHQ investment offer some upside potential.
The Invesco KBW Premium Yield Equity REIT ETF (KBWY) attracts investors with its high 7.72% SEC 30-day yield and monthly distributions, but carries significant risks. The fund focuses on smaller, riskier REITs and has received Morningstar's lowest one-star rating over multiple periods. Key holdings like Innovative Industrial Properties and Community Healthcare Trust have experienced substantial declines, with the ETF itself down 6% year-over-year and 21% over five years.