Alexander’s (NYSE:ALX – Get Free Report) and Innovative Industrial Properties (NYSE:IIPR – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.
Risk and Volatility
Alexander’s has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, Innovative Industrial Properties has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500.
Institutional & Insider Ownership
32.0% of Alexander’s shares are owned by institutional investors. Comparatively, 70.6% of Innovative Industrial Properties shares are owned by institutional investors. 26.3% of Alexander’s shares are owned by company insiders. Comparatively, 2.0% of Innovative Industrial Properties shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Alexander’s | $213.18 million | 5.62 | $28.22 million | $5.49 | 42.73 |
| Innovative Industrial Properties | $308.52 million | 4.18 | $161.66 million | $4.22 | 10.90 |
Innovative Industrial Properties has higher revenue and earnings than Alexander’s. Innovative Industrial Properties is trading at a lower price-to-earnings ratio than Alexander’s, indicating that it is currently the more affordable of the two stocks.
Dividends
Alexander’s pays an annual dividend of $18.00 per share and has a dividend yield of 7.7%. Innovative Industrial Properties pays an annual dividend of $7.60 per share and has a dividend yield of 16.5%. Alexander’s pays out 327.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Innovative Industrial Properties pays out 180.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alexander’s has increased its dividend for 1 consecutive years and Innovative Industrial Properties has increased its dividend for 4 consecutive years. Innovative Industrial Properties is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Alexander’s and Innovative Industrial Properties, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Alexander’s | 0 | 1 | 0 | 1 | 3.00 |
| Innovative Industrial Properties | 3 | 2 | 1 | 0 | 1.67 |
Innovative Industrial Properties has a consensus target price of $68.20, indicating a potential upside of 48.29%. Given Innovative Industrial Properties’ higher probable upside, analysts plainly believe Innovative Industrial Properties is more favorable than Alexander’s.
Profitability
This table compares Alexander’s and Innovative Industrial Properties’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Alexander’s | 13.24% | 20.68% | 2.23% |
| Innovative Industrial Properties | 45.80% | 6.77% | 5.40% |
Summary
Innovative Industrial Properties beats Alexander’s on 11 of the 18 factors compared between the two stocks.
About Alexander’s
Alexander’s, Inc. (NYSE: ALX) is a real estate investment trust (REIT), incorporated in Delaware, engaged in leasing, managing, developing and redeveloping its properties. All references to we, us, our, Company and Alexander’s refer to Alexander’s, Inc. and its consolidated subsidiaries. We are managed by, and our properties are leased and developed by, Vornado Realty Trust (Vornado) (NYSE: VNO). We have five properties in New York City.
About Innovative Industrial Properties
Innovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized properties leased to experienced, state-licensed operators for their regulated cannabis facilities. Innovative Industrial Properties, Inc. has elected to be taxed as a real estate investment trust, commencing with the year ended December 31, 2017.
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