Innovative Industrial Properties (NYSE:IIPR) and Alexander’s (NYSE:ALX) Head to Head Survey

Innovative Industrial Properties (NYSE:IIPR) and Alexander’s (NYSE:ALX) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Analyst Recommendations

This is a summary of current ratings for Innovative Industrial Properties and Alexander’s, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Innovative Industrial Properties	3	2	0	0	1.40
Alexander’s	0	1	0	1	3.00

Innovative Industrial Properties presently has a consensus price target of $52.75, indicating a potential upside of 14.90%. Given Innovative Industrial Properties’ higher possible upside, equities research analysts clearly believe Innovative Industrial Properties is more favorable than Alexander’s.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Innovative Industrial Properties	$308.52 million	4.17	$161.66 million	$4.22	10.88
Alexander’s	$213.18 million	5.81	$28.22 million	$5.49	44.14

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Innovative Industrial Properties	45.80%	6.77%	5.40%
Alexander’s	13.24%	20.68%	2.23%

Insider and Institutional Ownership

70.6% of Innovative Industrial Properties shares are held by institutional investors. Comparatively, 32.0% of Alexander’s shares are held by institutional investors. 2.0% of Innovative Industrial Properties shares are held by insiders. Comparatively, 26.3% of Alexander’s shares are held by 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.

Dividends

Innovative Industrial Properties pays an annual dividend of $7.60 per share and has a dividend yield of 16.6%. Alexander’s pays an annual dividend of $18.00 per share and has a dividend yield of 7.4%. 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. Alexander’s pays out 327.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Innovative Industrial Properties has increased its dividend for 4 consecutive years and Alexander’s has increased 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.

Risk & Volatility

Innovative Industrial Properties has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500. Comparatively, Alexander’s has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Summary

Innovative Industrial Properties beats Alexander’s on 10 of the 17 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 Alexander’s

Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (REIT), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties. All references to we, us, our, Company and Alexander’s refer to Alexander’s, Inc. and its consolidated subsidiaries. We are managed by, and our properties are leased and developed by, Vornado Realty Trust (Vornado) (NYSE: VNO). We have five properties in New York City.