Whitestone REIT (NYSE:WSR – Get Free Report) and Innovative Industrial Properties (NYSE:IIPR – Get Free Report) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, profitability, institutional ownership and earnings.
Dividends
Whitestone REIT pays an annual dividend of $0.54 per share and has a dividend yield of 3.7%. Innovative Industrial Properties pays an annual dividend of $7.60 per share and has a dividend yield of 15.8%. Whitestone REIT pays out 63.5% of its earnings in the form of a dividend. 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. Whitestone REIT has raised its dividend for 5 consecutive years and Innovative Industrial Properties has raised its dividend for 4 consecutive years.
Analyst Ratings
This is a summary of recent recommendations and price targets for Whitestone REIT and Innovative Industrial Properties, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Whitestone REIT | 0 | 0 | 5 | 0 | 3.00 |
| Innovative Industrial Properties | 3 | 2 | 1 | 0 | 1.67 |
Profitability
This table compares Whitestone REIT and Innovative Industrial Properties’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Whitestone REIT | 28.16% | 10.10% | 3.89% |
| Innovative Industrial Properties | 45.80% | 6.77% | 5.40% |
Volatility & Risk
Whitestone REIT has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Innovative Industrial Properties has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500.
Valuation and Earnings
This table compares Whitestone REIT and Innovative Industrial Properties”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Whitestone REIT | $154.28 million | 4.80 | $36.89 million | $0.85 | 17.06 |
| Innovative Industrial Properties | $308.52 million | 4.38 | $161.66 million | $4.22 | 11.43 |
Innovative Industrial Properties has higher revenue and earnings than Whitestone REIT. Innovative Industrial Properties is trading at a lower price-to-earnings ratio than Whitestone REIT, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
69.5% of Whitestone REIT shares are owned by institutional investors. Comparatively, 70.6% of Innovative Industrial Properties shares are owned by institutional investors. 3.2% of Whitestone REIT 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 hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Summary
Innovative Industrial Properties beats Whitestone REIT on 9 of the 17 factors compared between the two stocks.
About Whitestone REIT
Whitestone REIT (NYSE: WSR) is a community-centered real estate investment trust (REIT) that acquires, owns, operates, and develops open-air, retail centers located in some of the fastest growing markets in the country: Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio. Our centers are convenience focused: merchandised with a mix of service-oriented tenants providing food (restaurants and grocers), self-care (health and fitness), services (financial and logistics), education and entertainment to the surrounding communities. The Company believes its strong community connections and deep tenant relationships are key to the success of its current centers and its acquisition strategy.
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.
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