Is This Company's Monster 11% Dividend Yield Safe?
When investing in dividend stocks, opting for high yields can be a seductive strategy. However, a high yield means little if a company cannot sustain it and is, eventually, forced to slash its payouts. That's why income-seeking investors should focus first and foremost on a corporation's underlying business.
That brings us to Innovative Industrial Properties (NYSE: IIPR), a real estate investment trust (REIT) focused on the medical cannabis sector. The company's forward yield of about 11% looks attractive, but is it sustainable?
Innovative Industrial Properties (IIP) buys properties from cannabis growers and leases them back to those same companies, allowing them to free up cash. The company's business model works, at least somewhat, for one key reason. Since marijuana remains illegal at the federal level in the U.S. and is still classified as a Schedule I substance, it can be challenging for cannabis companies to access banking-related services.
Source Fool.com
