This Dividend Stock Could Be Safe Bet Regardless of Market Conditions
Dividend stocks have prospered for years in a low-interest rate environment. When bank depositors struggled to earn even a 0.5% return on their money, the 1.7% average dividend yield for the S&P 500 looked increasingly appealing.
As the 9.1% inflation rate has driven interest rates higher, income investors seem to have rotated out of some stocks, including cannabis-focused industrial REIT Innovative Industrial Properties (NYSE: IIPR). IIP now faces additional pressure, as one of its larger clients has defaulted on rent obligations. Nonetheless, with a high-yielding dividend, a history of high payout growth, and its role in a fast-growing industry, IIP can benefit income investors with some degree of risk tolerance in today's environment.
IIP is a real estate investment trust (REIT) that leases production facilities to growers of medical cannabis. It buys and develops properties; this real estate focus means it doesn't fall under the Schedule I restrictions that limit its clients. Schedule I restrictions mean that the federal government holds that cannabis offers no medical benefits and has a high abuse risk, and thus, is highly restricted. This means that IIP and all businesses in the marijuana industry prosper due to generally more lenient regulations in individual states.
Source Fool.com
