Analyzing Innovative Industrial Properties (NYSE:IIPR) & COPT Defense Properties (NYSE:CDP)

COPT Defense Properties (NYSE:CDP) and Innovative Industrial Properties (NYSE:IIPR) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Analyst Ratings

This is a summary of recent ratings and recommmendations for COPT Defense Properties and Innovative Industrial Properties, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
COPT Defense Properties	0	2	6	0	2.75
Innovative Industrial Properties	2	6	1	1	2.10

COPT Defense Properties presently has a consensus price target of $33.57, indicating a potential upside of 17.65%. Innovative Industrial Properties has a consensus price target of $78.67, indicating a potential upside of 43.15%. Given Innovative Industrial Properties’ higher possible upside, analysts clearly believe Innovative Industrial Properties is more favorable than COPT Defense Properties.

Institutional and Insider Ownership

70.6% of Innovative Industrial Properties shares are owned by institutional investors. 1.4% of COPT Defense Properties shares are owned by company insiders. Comparatively, 2.0% of Innovative Industrial Properties shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares COPT Defense Properties and Innovative Industrial Properties”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
COPT Defense Properties	$753.27 million	4.28	$138.93 million	$1.28	22.29
Innovative Industrial Properties	$308.52 million	4.99	$161.66 million	$4.62	11.89

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

Dividends

COPT Defense Properties pays an annual dividend of $1.22 per share and has a dividend yield of 4.3%. Innovative Industrial Properties pays an annual dividend of $7.60 per share and has a dividend yield of 13.8%. COPT Defense Properties pays out 95.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Innovative Industrial Properties pays out 164.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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.

Volatility & Risk

COPT Defense Properties has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, Innovative Industrial Properties has a beta of 1.64, meaning that its stock price is 64% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
COPT Defense Properties	19.23%	9.38%	3.39%
Innovative Industrial Properties	47.71%	7.26%	5.83%

Summary

Innovative Industrial Properties beats COPT Defense Properties on 12 of the 18 factors compared between the two stocks.

About COPT Defense Properties

COPT Defense Properties is a real estate investment trust. It acquires, develops, manages, sells, and leases out office properties and data centers. The firm operates through the following segments: Defense/Information Technology Locations, Regional Office, Wholesale Data Center, and Other. The company was founded on January 22,1988 and is headquartered in Columbia, MD.

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.