Analyzing Innovative Industrial Properties (NYSE:IIPR) and Lineage (NASDAQ:LINE)

Innovative Industrial Properties (NYSE:IIPR) and Lineage (NASDAQ:LINE) are both real estate companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Valuation and Earnings

This table compares Innovative Industrial Properties and Lineage”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Innovative Industrial Properties	$265.95 million	5.70	$118.25 million	$4.43	12.41
Lineage	$5.36 billion	1.47	-$100.00 million	($0.72)	-47.93

Innovative Industrial Properties has higher earnings, but lower revenue than Lineage. Lineage 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.

Dividends

Innovative Industrial Properties pays an annual dividend of $7.60 per share and has a dividend yield of 13.8%. Lineage pays an annual dividend of $2.13 per share and has a dividend yield of 6.2%. Innovative Industrial Properties pays out 171.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lineage pays out -295.8% of its earnings in the form of a dividend. Innovative Industrial Properties has raised its dividend for 4 consecutive years. Innovative Industrial Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings for Innovative Industrial Properties and Lineage, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Innovative Industrial Properties	1	2	3	1	2.57
Lineage	3	8	5	0	2.12

Innovative Industrial Properties presently has a consensus target price of $54.25, suggesting a potential downside of 1.30%. Lineage has a consensus target price of $41.93, suggesting a potential upside of 21.51%. Given Lineage’s higher possible upside, analysts plainly believe Lineage is more favorable than Innovative Industrial Properties.

Volatility and Risk

Innovative Industrial Properties has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500. Comparatively, Lineage has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Profitability

This table compares Innovative Industrial Properties and Lineage’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Innovative Industrial Properties	53.20%	8.01%	5.62%
Lineage	-3.15%	-1.85%	-0.89%

Insider & Institutional Ownership

70.6% of Innovative Industrial Properties shares are owned by institutional investors. 2.3% of Innovative Industrial Properties shares are owned by company insiders. Comparatively, 71.6% of Lineage shares are owned by company 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.

Summary

Innovative Industrial Properties beats Lineage on 13 of the 18 factors compared between the two stocks.

About Innovative Industrial Properties

Innovative Industrial Properties, Inc. (NYSE: IIPR) is a real estate investment trust focused on properties used by the regulated cannabis industry. The company acquires and owns specialized facilities, such as cultivation and processing sites, and leases them to state-licensed cannabis operators. IIPR commonly uses sale-leaseback transactions, in which an operator sells a property to the company and then leases it back. Its leases are generally structured so tenants are responsible for property expenses, including taxes, insurance and maintenance.

About Lineage

Lineage, Inc. is a global temperature-controlled warehousing and logistics company. It operates refrigerated and frozen storage facilities that help food producers, retailers, and other customers manage products that require controlled temperatures. Its services include cold storage, food processing and handling, blast freezing, transportation, and other supply-chain solutions. By connecting warehouses with transportation and distribution networks, Lineage supports the movement of perishable goods from producers to consumers.