Innovative Industrial: 15% Yield, 1.4x Debt To EBITDA, Inflection Point In Defaults

Julian LinInvesting Group LeaderFollow5ShareSavePlay(9min)CommentsSummaryInnovative Industrial Properties remains a "Strong Buy," offering a near-15% yield and a best-in-class balance sheet despite tenant challenges.IIPR’s low leverage (1.6x EBITDA) and minimal lease expirations provide resilience, even if a dividend cut occurs to support IQHQ investments.Recent leasing progress and an inflection point in tenant defaults support optimism, with AFFO per share rising sequentially from $1.71 to $1.88.Potential cannabis rescheduling remains a key catalyst, and IIPR’s valuation appears to price in worst-case scenarios, presenting compelling upside.Looking for a portfolio of ideas like this one? Members of Best Of Breed Growth Stocks get exclusive access to our subscriber-only portfolios. Learn More » PetroliniVideo/iStock via Getty Images Innovative Industrial Properties (IIPR) has bounced handily from the lows. The company appears to have reached an inflection point in dealing with tenants in default. Even after the recent rally, the stock still has not priced in the optimism, with the stock yieldingThis article was written byJulian Lin37.29K FollowersFollowJulian Lin is a financial analyst. He finds undervalued companies with secular growth that appreciate over time. His approach is to look for companies with strong balance sheets and management teams in sectors with long growth runways. Julian is the leader of the investing group Best Of Breed Growth Stocks where he only shares positions in stocks which have a large probability of delivering large alpha relative to the S&P 500. He also combines growth-oriented principles with strict valuation hurdles to add an additional layer to the conventional margin of safety. Features include: exclusive access to Julian's highest conviction picks, full stock research reports, real-time trade alerts, macro market analysis, individual industry reports, a filtered watchlist, and community chat with access to Julian 24/7. Learn more.Analyst’s Disclosure: I/we have a beneficial long position in the shares of IIPR, O, IIPR.PR.A either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.