Innovative Industrial (NYSE: IIPR) and Terreno Realty (NYSE:TRNO) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.
Risk & Volatility
Get Innovative Industrial alerts:
Innovative Industrial has a beta of -0.95, indicating that its share price is 195% less volatile than the S&P 500. Comparatively, Terreno Realty has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500.
Insider and Institutional Ownership
49.2% of Innovative Industrial shares are held by institutional investors. Comparatively, 98.3% of Terreno Realty shares are held by institutional investors. 6.2% of Innovative Industrial shares are held by insiders. Comparatively, 2.6% of Terreno Realty shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of current ratings and price targets for Innovative Industrial and Terreno Realty, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Innovative Industrial | 0 | 0 | 1 | 0 | 3.00 |
| Terreno Realty | 0 | 4 | 7 | 0 | 2.64 |
Innovative Industrial currently has a consensus target price of $34.00, suggesting a potential downside of 7.23%. Terreno Realty has a consensus target price of $38.50, suggesting a potential upside of 1.72%. Given Terreno Realty’s higher probable upside, analysts clearly believe Terreno Realty is more favorable than Innovative Industrial.
Earnings and Valuation
This table compares Innovative Industrial and Terreno Realty’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Innovative Industrial | $6.42 million | 36.31 | -$70,000.00 | $0.67 | 54.70 |
| Terreno Realty | $132.48 million | 15.99 | $53.09 million | $1.09 | 34.72 |
Terreno Realty has higher revenue and earnings than Innovative Industrial. Terreno Realty is trading at a lower price-to-earnings ratio than Innovative Industrial, indicating that it is currently the more affordable of the two stocks.
Dividends
Innovative Industrial pays an annual dividend of $1.00 per share and has a dividend yield of 2.7%. Terreno Realty pays an annual dividend of $0.88 per share and has a dividend yield of 2.3%. Innovative Industrial pays out 149.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Terreno Realty pays out 80.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Terreno Realty has increased its dividend for 5 consecutive years.
Profitability
This table compares Innovative Industrial and Terreno Realty’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Innovative Industrial | 14.26% | 1.42% | 1.21% |
| Terreno Realty | 40.10% | 5.59% | 3.62% |
Summary
Terreno Realty beats Innovative Industrial on 12 of the 17 factors compared between the two stocks.
About Innovative Industrial
Innovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. Innovative Industrial Properties, Inc. intends to elect to be taxed as a real estate investment trust. Additional information is available at www.innovativeindustrialproperties.com.
About Terreno Realty
Terreno Realty Corporation acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C. Additional information about Terreno Realty Corporation is available on the company's web site at www.terreno.com.
