AFCG - September 2023's Top Cannabis REITs with Attractive Dividend Yields
2023-09-20 20:55:08 ET
Secure Your Dividends: Best Cannabis REITs for September 2023
As the calendar turns to September, investors seeking long-term gains and high dividend yields are turning to the expanding cannabis business. In general, with global marijuana legalization on the upswing, now is an excellent time to investigate the top marijuana Real Estate Investment Trusts (REITs) to add to your watchlist.
Specifically, the cannabis industry has grown exponentially in recent years, with market analysts forecasting that the global economy will top $100 billion by 2030. In addition, this profitable scenario, combined with a rising number of countries relaxing cannabis legislation, has piqued the curiosity of investors seeking capital appreciation and consistent dividend payments. In this article, we will look at the top marijuana REITs , which promise exposure to this burgeoning industry and high dividend yields, making them great additions to your investment portfolio for September and beyond.
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Top Marijuana REITs with High Dividends: September 2023 Watchlist
- Innovative Industrial Properties, Inc. ( NYSE: IIPR )
- NewLake Capital Partners, Inc. ( OTC: NLCP )
- AFC Gamma, Inc. ( NASDAQ: AFCG )
Innovative Industrial Properties, Inc.
Innovative Industrial Properties, Inc. is an American cannabis-focused real estate investment business. In general, the company presently has 8.7 million square feet of rentable space, with another 2.5 million square feet on the way. Furthermore, with an average lease period of 16.4 years, the bulk of these properties are fully leased. The firm currently has 111 locations spread throughout 19 states. IIP had already spent $2.4 billion on property repairs by April, in addition to the $227.1 million in anticipated rent payments. The company expects its portfolio to grow significantly in 2022 as a result of ongoing real estate investments in Pennsylvania and Massachusetts.
Second Quarter 2023
Financial Results
- Generated total revenues of approximately $76.5 million in the quarter, representing an 8% increase from the prior year’s quarter.
- Recorded net income attributable to common stockholders of approximately $40.9 million for the quarter, or $1.44 per diluted share.
- Recorded adjusted fund from operations (AFFO) of approximately $64.0 million, or $2.26 per diluted share, increases of 6% and 5% from the prior year’s quarter, respectively.
- Paid a quarterly dividend of $1.80 per common share on July 14, 2023 to stockholders of record as of June 30, 2023. The common stock dividends declared for the twelve months ended June 30, 2023 of $7.20 per common share represent an increase of $0.70, or 11%, over dividends declared for the twelve months ended June 30, 2022.
IIPR Stock Performance
On September 19 th , IIPR stock closed at $84.77, up 11.14% in the last month of trading. Additionally, the stock is trading in a 52-week price range of $63.36-$125.38, down 16.36% year to date. In this case, IIPR stock has a 12-month median price target of $95 per share, according to CNN Business analysts. In this forecast, this would be an 11.99% increase over the last trade price of $84.77.
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NewLake Capital Partners, Inc.
NewLake Capital Partners, Inc. is an internally managed real estate investment trust that provides real estate capital to state-licensed cannabis businesses through sale-leaseback transactions, third-party purchases, and build-to-suit funding. In addition, NewLake owns a portfolio of 32 cultivation facilities and dispensaries that are triple-net-leased to single tenants.
Second Quarter 2023 Financial Highlights
Comparison to the first quarter ended March 31, 2023
- Quarter-over-quarter revenue, net income, Funds from Operations (“FFO”), and Adjusted Funds from Operations (“AFFO”) were flat. As a result, presented below are only the second quarter financial highlights.
- Revenue totaled $11.4 million.
- Net income attributable to common stockholders totaled $5.8 million.
- FFO(1) totaled $9.5 million.
- AFFO-diluted(1) totaled $9.9 million.
- Cash and cash equivalents as of June 30, 2023, were $40.7 million, with $22.8 million committed to fund Tenant Improvements (“TIs”).
Dividend
On June 15, 2023, the Company declared a second quarter 2023 cash dividend of $0.39 per share of common stock, equivalent to an annualized dividend of $1.56 per share of common stock. The dividend was paid on July 14, 2023 to stockholders of record at the close of business on June 30, 2023.
Outlook for 2023
NewLake Capital is providing AFFO guidance for full year 2023 of $39.8 to $40.8 million, an increase of 4.1% over AFFO for the same period the prior year, assuming the midpoint of that range. On September 18 th, the company announced and provided an update regarding its $10 million common share repurchase program. To date, the Company has acquired 713,831 shares of common stock at an average price, including commissions, of $12.96 per share, utilizing approximately $9.3 million of the original $10 million authorization. Thus, on September 15, 2023, the Company’s board of directors authorized a $10 million increase to the Company’s existing share repurchase program and extended the duration to conclude on December 31, 2024, giving the Company approximately $10.7 million remaining available under the program.
NLCP Stock Performance
NLCP stock closed at $13.99 on September 19 th , up 10.59% in the past month of trading. Additionally, the stock has a price range of $11.80-$19.50 and is down 12.67% year to date. In this case, analysts at Tip Ranks predict that the 12-month average price for NLCP shares will be $15.50. In comparison to the stock’s most recent trading price of $13.99, this prediction shows a gain of 10.79 percent.
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AFC Gamma, Inc.
AFC Gamma, Inc. is a well-known cannabis ancillary company that properly controls its cash flow and capacity. The company, which was founded in 2020, focuses on supply and demand theories, markets for those theories, real estate security, and other forms of collateral. Specifically, first-lien loans, mortgage loans, construction loans, bridge financings, and other unorthodox methods of financing are among AFCG’s specialties. AFC Gamma’s most recent marketing initiatives have concentrated on the rapidly expanding cannabis market. In addition, the corporation granted Verano Holdings Inc. a $100 million option and a $250 million credit line.
Second Quarter 2023 Financial Highlights
- Second quarter GAAP net income of $12.1 million or $0.59 per basic weighted average common share and Distributable Earnings(1) of $9.9 million or $0.49 per basic weighted average common share
- Declared dividend of $0.48 per common share for second quarter 2023
AFCG Stock Performance
On September 19 th , AFCG shares closed at $12.83, a 4.99% increase from the previous month of trading. The stock, which has a price range of $9.91 to $17.72, is down 18.44% year to date. In this case, analysts at CNN Business predict that the 12-month average price for AFCG shares will be $17.50. In comparison to the stock’s most recent trading price of $12.83, this prediction shows a gain of 36.19 percent.
High Dividend Potential: Marijuana REITs for Your September Portfolio Watchlist
Finally, September 2023 represents an intriguing opportunity for investors to watch cannabis REITs. These companies provide both long-term growth potential and enticing dividend payouts. The worldwide cannabis market is expanding at a rapid pace, spurred by a wave of legalization and growing public acceptance. As more countries legalize cannabis, the demand for specialized real estate properties such as growing facilities and dispensaries could skyrocket. As a result of this trend, cannabis REITs have risen to the top of the list of profitable investment possibilities. For investors looking to profit from the industry’s growth while receiving steady income through dividends.
In conclusion, consider the marijuana REITs described in this article as you develop your September watchlist, as each offers a unique blend of exposure to the burgeoning cannabis market and significant dividend distributions. Overall, these investments provide a source of passive income and reflect the potential for capital appreciation as the industry evolves, making them attractive additions to a diversified portfolio. With the cannabis sector poised for further growth, these high-dividend REITs are well-positioned to bring financial development and income security in the next months and years.