Did You Miss Innovative Industrial Properties’s (NYSE:IIPR) 95% Share Price Gain?

Innovative Industrial Properties, Inc. (NYSE:IIPR) shareholders might understandably be very concerned that the share price has dropped 32% in the last quarter. But that doesn’t change the fact that the returns over the last year have been pleasing. Looking at the full year, the company has easily bested an index fund by gaining 95%.

Check out our latest analysis for Innovative Industrial Properties

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Innovative Industrial Properties was able to grow EPS by 135% in the last twelve months. It’s fair to say that the share price gain of 95% did not keep pace with the EPS growth. Therefore, it seems the market isn’t as excited about Innovative Industrial Properties as it was before. This could be an opportunity. Of course, with a P/E ratio of 76.56, the market remains optimistic.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

NYSE:IIPR Past and Future Earnings, October 10th 2019
NYSE:IIPR Past and Future Earnings, October 10th 2019

It’s probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Innovative Industrial Properties’s earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Innovative Industrial Properties, it has a TSR of 100% for the last year. That exceeds its share price return that we previously mentioned. And there’s no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Innovative Industrial Properties shareholders should be happy with the total gain of 100% over the last twelve months , including dividends . We regret to report that the share price is down 32% over ninety days. Shorter term share price moves often don’t signify much about the business itself. If you would like to research Innovative Industrial Properties in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.