IIPR pref looks cheap
Innovative Industrial Properties’ common stock jumped after Q4 results, but the Series A preferred shares are trading at roughly a 10% yield and appear undervalued given low leverage and strong dividend coverage. (x.com) For income hunters the preferred could be a higher-yield play relative to the already-positive reaction in the common. (x.com)
Full-year 2025 adjusted funds from operations (AFFO) totaled $205.4 million, or $7.24 per diluted share, while fourth-quarter AFFO was $53.3 million ($1.88 per share) and Q4 revenue was $66.7 million; the board declared a common dividend that annualizes to $7.60 per share. (investors.innovativeindustrialproperties.com) IIPR has raised $146 million of debt and preferred equity since October 2025, including over $40 million of preferred issuance in early 2026 priced at just over a 9.5% yield, and closed a new $100 million secured revolving credit facility. (investors.innovativeindustrialproperties.com) The company reported gross debt of roughly $393.7 million, preferred equity of about $50.5 million, a debt-to-gross-assets ratio near 14%, liquidity in excess of $105 million at year-end, and a reported net debt-to-adjusted-EBITDA metric around 1.4x. (quartr.com) IIPR’s 9.00% Series A preferred pays $0.5625 quarterly (equivalent to $2.25 annually) and the Series A has traded as low as $22.45 — a level that pushed its cash yield above 10% on the day reported. (preferredstockchannel.com) The common moved materially after the quarter, gaining roughly 10.7% the day after the release to close at $51.10, while the company’s declared common dividend of $7.60 implies a yield of about 14.9% using that close and the announced payout. (marketchameleon.com) Despite low reported leverage, multiple coverage metrics show the dividend is tightly matched to cash generation: some firm calculations put annualized Q4 AFFO per share at about $7.52 versus the $7.60 annualized common dividend, producing an AFFO payout ratio at or slightly above 100% amid recent tenant-related revenue shortfalls. (quartr.com)
