Innovative Industrial Properties (NYSE:IIPR) Has Rewarded Shareholders With An Exceptional 631% Total Return On Their Investment

For us, stock picking is in large part the hunt for the truly magnificent stocks. You won't get it right every time, but when you do, the returns can be truly splendid. Take, for example, the Innovative Industrial Properties, Inc. (NYSE:IIPR) share price, which skyrocketed 558% over three years. On top of that, the share price is up 34% in about a quarter.

We love happy stories like this one. The company should be really proud of that performance!

Check out our latest analysis for Innovative Industrial Properties

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Innovative Industrial Properties became profitable within the last three years. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on Innovative Industrial Properties' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Innovative Industrial Properties, it has a TSR of 631% for the last 3 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's nice to see that Innovative Industrial Properties shareholders have gained 43% (in total) over the last year. That includes the value of the dividend. The TSR has been even better over three years, coming in at 94% per year. It's always interesting to track share price performance over the longer term. But to understand Innovative Industrial Properties better, we need to consider many other factors. For example, we've discovered 4 warning signs for Innovative Industrial Properties (1 is a bit unpleasant!) that you should be aware of before investing here.

Innovative Industrial Properties is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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