Innovative Industrial Properties (NYSE:IIPR) & Park Hotels & Resorts (NYSE:PK) Financial Analysis

Innovative Industrial Properties (NYSE:IIPR) and Park Hotels & Resorts (NYSE:PK) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and price targets for Innovative Industrial Properties and Park Hotels & Resorts, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Innovative Industrial Properties	1	3	0	1	2.20
Park Hotels & Resorts	2	8	2	0	2.00

Innovative Industrial Properties presently has a consensus target price of $45.00, suggesting a potential downside of 17.59%. Park Hotels & Resorts has a consensus target price of $11.50, suggesting a potential upside of 1.10%. Given Park Hotels & Resorts’ higher possible upside, analysts clearly believe Park Hotels & Resorts is more favorable than Innovative Industrial Properties.

Dividends

Innovative Industrial Properties pays an annual dividend of $7.60 per share and has a dividend yield of 13.9%. Park Hotels & Resorts pays an annual dividend of $1.00 per share and has a dividend yield of 8.8%. Innovative Industrial Properties pays out 193.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Park Hotels & Resorts pays out -69.9% of its earnings in the form of a dividend. Innovative Industrial Properties has raised its dividend for 4 consecutive years and Park Hotels & Resorts has raised its dividend for 1 consecutive years. Innovative Industrial Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

70.6% of Innovative Industrial Properties shares are held by institutional investors. Comparatively, 92.7% of Park Hotels & Resorts shares are held by institutional investors. 2.0% of Innovative Industrial Properties shares are held by company insiders. Comparatively, 2.5% of Park Hotels & Resorts shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Innovative Industrial Properties and Park Hotels & Resorts”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Innovative Industrial Properties	$265.95 million	5.87	$118.25 million	$3.92	13.93
Park Hotels & Resorts	$2.54 billion	0.90	-$283.00 million	($1.43)	-7.95

Innovative Industrial Properties has higher earnings, but lower revenue than Park Hotels & Resorts. Park Hotels & Resorts is trading at a lower price-to-earnings ratio than Innovative Industrial Properties, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Innovative Industrial Properties has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500. Comparatively, Park Hotels & Resorts has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.

Profitability

This table compares Innovative Industrial Properties and Park Hotels & Resorts’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Innovative Industrial Properties	44.46%	6.43%	5.05%
Park Hotels & Resorts	-8.49%	-6.59%	-2.54%

Summary

Innovative Industrial Properties beats Park Hotels & Resorts on 12 of the 18 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 properties leased to experienced, state-licensed operators for their regulated 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.

About Park Hotels & Resorts

Park Hotels & Resorts, Inc. operates as a real estate investment trust, which owns and operates hotels and resorts. It operates through the Consolidated Hotels and Unconsolidated Hotels segments. Its portfolio of hotels and resorts include the Waldorf Astoria Hotels and Resorts, Conrad Hotels & Resorts, Hilton Hotels & Resorts, DoubleTree by Hilton, Embassy Suites by Hilton, Hilton Garden Inn, Hampton by Hilton, and Curio. The company was founded by Conrad Hilton in 1919 and is headquartered in Tysons, VA.