Innovative Industrial Properties (NYSE:IIPR) vs. Apple Hospitality REIT (NYSE:APLE) Critical Comparison

Apple Hospitality REIT (NYSE:APLE) and Innovative Industrial Properties (NYSE:IIPR) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Dividends

Apple Hospitality REIT pays an annual dividend of $0.96 per share and has a dividend yield of 8.1%. Innovative Industrial Properties pays an annual dividend of $7.60 per share and has a dividend yield of 14.8%. Apple Hospitality REIT pays out 131.5% 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 pays out 180.1% 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 increased 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.

Institutional & Insider Ownership

89.7% of Apple Hospitality REIT shares are held by institutional investors. Comparatively, 70.6% of Innovative Industrial Properties shares are held by institutional investors. 7.1% of Apple Hospitality REIT shares are held by company insiders. Comparatively, 2.0% of Innovative Industrial Properties shares are held 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.

Valuation and Earnings

This table compares Apple Hospitality REIT and Innovative Industrial Properties”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Apple Hospitality REIT	$1.42 billion	1.97	$214.06 million	$0.73	16.16
Innovative Industrial Properties	$308.52 million	4.67	$161.66 million	$4.22	12.19

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

Volatility & Risk

Apple Hospitality REIT has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Innovative Industrial Properties has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Apple Hospitality REIT and Innovative Industrial Properties, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Apple Hospitality REIT	0	4	2	0	2.33
Innovative Industrial Properties	2	6	1	0	1.89

Apple Hospitality REIT presently has a consensus target price of $12.70, suggesting a potential upside of 7.67%. Innovative Industrial Properties has a consensus target price of $78.50, suggesting a potential upside of 52.64%. Given Innovative Industrial Properties’ higher possible upside, analysts clearly believe Innovative Industrial Properties is more favorable than Apple Hospitality REIT.

Profitability

This table compares Apple Hospitality REIT and Innovative Industrial Properties’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Apple Hospitality REIT	12.37%	5.46%	3.55%
Innovative Industrial Properties	45.80%	6.77%	5.40%

Summary

Innovative Industrial Properties beats Apple Hospitality REIT on 9 of the 17 factors compared between the two stocks.

About Apple Hospitality REIT

Apple Hospitality REIT, Inc. (NYSE: APLE) is a publicly traded real estate investment trust (REIT) that owns one of the largest and most diverse portfolios of upscale, rooms-focused hotels in the United States. Apple Hospitality's portfolio consists of 223 hotels with more than 29,400 guest rooms located in 87 markets throughout 37 states as well as one property leased to third parties. Concentrated with industry-leading brands, the Company's hotel portfolio consists of 99 Marriott-branded hotels, 119 Hilton-branded hotels and five Hyatt-branded hotels.

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.