NewLake Capital: Why This 12% Dividend Yield Is Safer Than It Looks

Julian LinInvesting Group LeaderFollow5ShareSavePlay(10min)Comment(1)SummaryNewLake Capital offers a double-digit dividend yield, underpinned by a net cash balance sheet that reduces downside and liquidity risk.Rescheduling cannabis to Schedule III could significantly improve tenant credit quality and drive a re-rating of NLCP’s valuation and yield.Despite tenant distress and sector volatility, NLCP’s low leverage and long lease terms provide resilience and time to await regulatory catalysts.I reiterate a "Strong Buy" rating, emphasizing margin of safety from the balance sheet and 48% potential upside if rescheduling occurs.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 » kmatija/iStock via Getty Images It’s still a great time to be an income investor. NewLake Capital (NLCP) is offering a sky-high double-digit dividend yield. The cannabis landlord is still waiting on the rescheduling catalyst to take place, which would bolster the credit quality of itsThis article was written byJulian Lin37.45K 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 NLCP, IIPR, IIPR.PR.A, O 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.