Sunstone Hotel Investors (NYSE:SHO – Get Free Report) and Innovative Industrial Properties (NYSE:IIPR – Get Free Report) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, profitability and earnings.
Profitability
This table compares Sunstone Hotel Investors and Innovative Industrial Properties’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sunstone Hotel Investors | 3.84% | 2.27% | 1.25% |
| Innovative Industrial Properties | 45.58% | 6.62% | 5.10% |
Analyst Ratings
This is a breakdown of current ratings and price targets for Sunstone Hotel Investors and Innovative Industrial Properties, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sunstone Hotel Investors | 1 | 5 | 2 | 1 | 2.33 |
| Innovative Industrial Properties | 1 | 4 | 0 | 0 | 1.80 |
Institutional & Insider Ownership
99.4% of Sunstone Hotel Investors shares are owned by institutional investors. Comparatively, 70.6% of Innovative Industrial Properties shares are owned by institutional investors. 1.4% of Sunstone Hotel Investors 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, large money managers and endowments believe a stock is poised for long-term growth.
Volatility & Risk
Sunstone Hotel Investors has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Innovative Industrial Properties has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.
Dividends
Sunstone Hotel Investors pays an annual dividend of $0.36 per share and has a dividend yield of 3.0%. Innovative Industrial Properties pays an annual dividend of $7.60 per share and has a dividend yield of 12.7%. Sunstone Hotel Investors pays out 327.3% 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 194.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sunstone Hotel Investors has raised its dividend for 2 consecutive years and Innovative Industrial Properties has raised 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.
Earnings and Valuation
This table compares Sunstone Hotel Investors and Innovative Industrial Properties”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sunstone Hotel Investors | $960.13 million | 2.29 | $24.57 million | $0.11 | 107.50 |
| Innovative Industrial Properties | $265.95 million | 6.45 | $118.25 million | $3.91 | 15.25 |
Innovative Industrial Properties has lower revenue, but higher earnings than Sunstone Hotel Investors. Innovative Industrial Properties is trading at a lower price-to-earnings ratio than Sunstone Hotel Investors, indicating that it is currently the more affordable of the two stocks.
Summary
Innovative Industrial Properties beats Sunstone Hotel Investors on 11 of the 18 factors compared between the two stocks.
About Sunstone Hotel Investors
Sunstone Hotel Investors, Inc. is a lodging real estate investment trust ("REIT") that as of the date of this release owns 14 hotels comprised of 6,675 rooms, the majority of which are operated under nationally recognized brands. Sunstone's strategy is to create long-term stakeholder value through the acquisition, active ownership, and disposition of well-located hotel and resort real estate.
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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