IIPR - 2 Dividend Stocks With 10% Yields Investors Should Avoid
2023-04-29 08:15:00 ET
It can be tempting to invest in a high-yielding dividend . Above the 10% level, you're collecting a significant chunk of your original investment back in the form of dividends. But there's a big risk because if that dividend is unsustainable, a reduction to the payout may not only reduce the amount of dividends you collect, but it could also send the stock price into a tailspin. A couple of dividend stocks that investors should be wary of today are Innovative Industrial Properties (NYSE: IIPR) and Medical Properties Trust (NYSE: MPW) .
Innovative Industrial Properties (IIP) is a real estate investment trust (REIT) that helps provide cannabis producers with funding through sale-and-leaseback agreements. However, marijuana producers don't often make for the safest tenants, which is why IIP is a bit of a risky REIT to be investing in. While the marijuana industry has been growing, competition is fierce, particularly with the black market, and many producers are struggling to turn a profit and are burning through cash.
Over the past 12 months, shares of IIP have nosedived 56% as investors have grown bearish on this once-promising REIT. As a result of the decline, the stock now yields an incredible 11.2% -- that's more than 6 times the S&P 500 average of 1.7%. At such a high yield, you would only need to invest a little over $8,900 to earn $1,000 in annual dividends.
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2 Dividend Stocks With 10% Yields Investors Should Avoid