Critical Review: Healthpeak Properties (NYSE:DOC) and Innovative Industrial Properties (NYSE:IIPR)

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

Profitability

This table compares Innovative Industrial Properties and Healthpeak Properties’ 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%
Healthpeak Properties	-1.36%	-0.44%	-0.19%

Valuation & Earnings

This table compares Innovative Industrial Properties and Healthpeak Properties”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Innovative Industrial Properties	$308.52 million	4.61	$161.66 million	$4.22	12.02
Healthpeak Properties	$543.46 million	22.81	$243.14 million	($0.05)	-356.80

Healthpeak Properties has higher revenue and earnings than Innovative Industrial Properties. Healthpeak Properties 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.

Insider and Institutional Ownership

70.6% of Innovative Industrial Properties shares are owned by institutional investors. Comparatively, 93.6% of Healthpeak Properties shares are owned by institutional investors. 2.0% of Innovative Industrial Properties shares are owned by company insiders. Comparatively, 0.2% of Healthpeak Properties shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company 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 15.0%. Healthpeak Properties pays an annual dividend of $1.22 per share and has a dividend yield of 6.8%. 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. Healthpeak Properties pays out -2,440.0% of its earnings in the form of a dividend. 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.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Innovative Industrial Properties	2	3	1	0	1.83
Healthpeak Properties	1	6	6	0	2.38

Innovative Industrial Properties currently has a consensus target price of $68.20, indicating a potential upside of 34.46%. Healthpeak Properties has a consensus target price of $19.67, indicating a potential upside of 10.24%. Given Innovative Industrial Properties’ higher possible upside, research analysts clearly believe Innovative Industrial Properties is more favorable than Healthpeak Properties.

Volatility and Risk

Innovative Industrial Properties has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500. Comparatively, Healthpeak Properties has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Summary

Innovative Industrial Properties beats Healthpeak Properties 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 Healthpeak Properties

Healthpeak Properties, Inc. is a fully integrated real estate investment trust (REIT) and S&P 500 company. Healthpeak owns, operates, and develops high-quality real estate for healthcare discovery and delivery.