How "High" Can This 7% Yield Go?

Safety Net says... [Shield] AN OXFORD CLUB PUBLICATION [Wealthy Retirement]( [View in browser]( SPONSORED [Vladimir Putin Underestimates the Allies]( [Putin Underestimates]( Source: [www.kremlin.ru]( Vladimir Putin just made the biggest blunder of his career. His decision could crush some stocks... and send others soaring. [Here's what you need to know to help protect your family and your wealth...]( [SAFETY NET]( [How "High" Can This 7% Yield Go?]( [Marc Lichtenfeld, Chief Income Strategist, The Oxford Club]( [Marc Lichtenfeld]( Innovative Industrial Properties (NYSE: IIPR) lives up to its name. The company is an innovative real estate investment trust, or REIT, that leases its 108 real estate assets to 30 cannabis operators in 19 states. REITs are known for paying sizable dividends, and Innovative Industrial Properties' 7% annual yield makes it one of the higher-yielding REITs. Can it continue to pay such a strong dividend, or is management about to harsh investors' buzz? As you likely know by now, cash flow is one of the key factors we consider. For REITs, we use funds from operations (FFO) as our measure of cash flow. Innovative Industrial Properties' FFO has been rising for the past few years. It totaled $232 million in 2023 (up from $211 million the prior year), and I expect it to increase to around $250 million in 2024. [Chart: FFO Moving Higher and Higher]( [View larger image]( SPONSORED [Seven Must-Own Stocks for AI Investors]( [Next Magnificent Seven]( [Discover AI's "Next Magnificent Seven" Here.]( Last year, the company paid shareholders $204 million in dividends for an 88% payout ratio. I'm comfortable with REITs paying out up to 100% of their FFO in dividends, as they are required by law to pay out at least 90% of their earnings. (Earnings aren't the same as cash flow or FFO, but because of that obligation, REITs often pay out nearly all of their FFO to shareholders. That's why we raise our payout ratio limit from our typical 75% for normal stocks to 100% for REITs.) Even though Innovative Industrial Properties' payout ratio was comfortably below 100% in 2023, I expect it to be closer to the limit by the end of this year. Here's how that could affect the company's dividend... [Finish Reading Here]( [Investment U Conference 2025 - Ponte Vedra Inn & Club in Ponte Vedra Beach, Florida, March 30-April 2, 2025]( BUILD AND PROTECT YOUR WEALTH [Get Marc's Top 5 Dividend Stocks (FREE PICKS)]( [Could This Be the Best Insider Stock for 2024?]( [Here are Three Steps You Need to Take to Protect and Grow Your Money When America Is Threatened With Mass Unemployment. 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