AFCG - July 2023's Top Cannabis REITs: Dividend Powerhouses for Savvy Investors

2023-07-11 14:30:38 ET

Must-Watch Cannabis REITs: Uncovering Dividend Opportunities

Are you looking for the best marijuana stocks to invest in over time? The cannabis sector has emerged as a significant force in recent years, releasing a torrent of possibilities and financial opportunities. Cannabis Real Estate Investment Trusts, or Cannabis REITs, is a novel financial vehicle that has captured the attention of investors and piqued the interest of Wall Street and Main Street alike.

Marijuana REITs provide a one-of-a-kind business structure focused on owning and leasing property to licensed cannabis farmers. Cannabis REIT investors anticipate benefiting from these operators’ steady rental revenue and the underlying assets’ future worth. Furthermore, this investing method provides additional diversification because REITs typically maintain a portfolio of properties spread across multiple nations. Cannabis REITs have established themselves as a reliable choice for investors wishing to capitalize on the promise of the cannabis industry while limiting the risks associated with legal ambiguity and operational concerns.

Understanding the dividend stock potential of Cannabis REITs is becoming increasingly important as investors look for methods to diversify their portfolios and participate in the cannabis sector’s growth. By offering an in-depth review of the emerging cannabis market environment and the role of Cannabis REITs within it, this article aims to provide readers with the knowledge they need to make informed investment decisions and capitalize on opportunities in this exciting area of the financial world.

[Read More] Top Marijuana Stocks For Your 2023 Portfolio

Top Cannabis REITs July 2023: High Dividend Returns

1. Innovative Industrial Properties, Inc. ( NYSE: IIPR )
2. AFC Gamma, Inc. ( NASDAQ: AFCG )
3. Power REIT ( NYSE: PW )

Innovative Industrial Properties, Inc.

Innovative Industrial Properties, Inc. is a cannabis-focused real estate investment corporation based in the United States. The company currently has 8.7 million square feet of rentable property, with an additional 2.5 million square feet coming soon. Furthermore, most of these properties are fully leased, with an average lease length of 16.4 years. Currently, the corporation has 111 locations distributed over 19 states. In April, IIP had already spent $2.4 billion on property upgrades, on top of the $227.1 million in anticipated rent payments. As a result of continuous real estate investments in Pennsylvania and Massachusetts, the company anticipates its portfolio to rise significantly in 2022.

IIP’s total revenues in the first quarter of 2023 were about $76.1 million, representing an 18% increase over the same time the previous year. Furthermore, the firm reported net income attributable to common stockholders for the quarter of roughly $40.8 million, or $1.43 per diluted share. Furthermore, on April 14, 2023, IIP paid a quarterly dividend of $1.80 per common share (for an annualized dividend of $7.20 per share) to stockholders of record on March 31, 2023 (with an AFFO payout ratio of 80%). The dividend of $7.15 per common share declared for the fiscal year ended March 31, 2023, is a $1.00, or 16%, increase over the dividends declared for the fiscal year ended March 31, 2022.

The company’s property portfolio contained 8.9 million rentable square feet as of the first quarter 2023 (including approximately 1.6 million under development or restoration).

IIPR Stock Performance

On July 10 ^th , IIPR stock closed at $73.52, up 4.12% in the last month of trading. The stock is trading in a 52-week price range of $63.36-$125.38, down 27.34% year to date. In this case, IIPR stock has a 12-month median price target of $100 per share, according to CNN Business analysts. In this forecast, this would be a 36.18% increase over the last trade price of $73.52.

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AFC Gamma, Inc.

AFC Gamma, Inc. is a well-known cannabis ancillary company that correctly controls its cash flow and capacity. The company was founded in 2020 and is primarily concerned with supply and demand theories, markets for those theories, real estate security, and other forms of collateral. First-lien loans, mortgage loans, construction loans, bridge financings, and other unorthodox types of financing are among AFCG’s strengths. AFC Gamma’s most recent marketing efforts have concentrated on the rapidly expanding cannabis market. The corporation provided Verano Holdings Inc. with a $100 million option and a $250 million credit line.

First Quarter Financial Highlights

• First quarter GAAP net income of $10.0 million or $0.49 per basic weighted average common share and
• Distributable Earnings(1) of $11.6 million or $0.57 per basic weighted average common share
• Declared dividend of $0.56 per common share for the first quarter of 2023
• The Board of Directors of AFC Gamma declared a quarterly dividend for the quarter ending June 30, 2023, of $0.48 per outstanding share of common stock, payable on July 14, 2023, to the common stockholders of record on June 30, 2023. The $0.48 quarterly dividend represents an annual run rate of $1.92.

AFCG Stock Performance

On July 10 ^th , AFCG shares closed at $12.68, a 3.51 percent increase from the previous trading month. The stock, which has a price range of $9.91 to $19, is down 19.39% year to date. In this case, analysts at CNN Business predict that the 12-month average price for AFCG shares will be $16.00. In comparison to the stock’s most recent trading price of $12.68, this prediction shows a gain of 25.98 percent.

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Power REIT (PW)

The major goal of Power REIT is to create a real estate investment trust that favors long-term investments with higher risk-adjusted returns. The firm’s portfolio of CEA properties is gradually expanding to include new processing facilities and greenhouses. Tenants granted permission to plant medical marijuana on the plot have taken over the leases for the structures. Power REIT will use the funds to perform the necessary improvements to the assets ready for development. Power REIT owns greenhouse facilities.

In the second quarter of 2022, PW reported a core FFO of $0.41 per share, down from $0.51 in the same period the prior year. Furthermore, core FFO was $0.41 per share for the June 30, 2022, quarter, compared to $0.40 per share for the March 31, 2022, quarter. PW maintains roughly 2.2 million square feet of controlled environment agriculture (CEA) space through 22 greenhouses.  PW owns 601 acres of REIT Power Series land and seven ground leases totaling 112 kilometers of railroad land. The Trust paid an annual dividend of about $163,000 on redeemable perpetual preferred stock ($0.484375 per share).

PW Stock Performance

PW stock closed on July 10 ^th at $1.54, down 14.44% for the last month of trading. In this case, the stock has a 52-week price range of $1.50-$21.80 and is down 61.01% year to date.

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Cannabis REITs with Strong Dividend Potential

In general, these ancillary cannabis stocks can be an excellent choice for long-term investors interested in the cannabis industry. Always conduct your research before investing in a company. In order to identify which companies are the best investments, it is also required to review their financial statements and press releases. These top marijuana stocks should be on your radar if you want to invest for the long term in 2023.