The last thing the market needed this week was the Saudi Arabia oil attack. Of course, the attack eliminated 5% of the global oil supply and rattled markets.
We were right back at historical highs, and bam, another crisis to worry about.
Even the yield curve is normalizing. Plus, interest rates are actually increasing thanks to strong economic data in the United States.
Some things never change.
Investors don’t learn. They are ready to deploy capital at a moment’s notice, often at the wrong time.
The attack on the Saudi oil field should make it clear to any investor that equity risk is very high at the moment.
At any moment, the markets can flip, but the message isn’t being heard.
Once-in-a-Lifetime Summit: Cannabis IPO Expert Danny Brody has turned little-known startups into booming $1.6 billion businesses. Here’s how you can make YOUR fortune on today’s cannabis underdogs. Click here to check it out…
Investors are buying stocks haphazardly, mostly on hopes of another rate cut at the U.S. Federal Reserve.
But unless you own the right stocks in this market, there are few places to hide.
One option that looks safe and secure at the moment is REITs. In particular, the best marijuana REIT, which we’ll show you today, offers tremendous upside while also paying a hefty dividend.
These high-dividend-paying REITs make a ton of sense in a market with significant downside risk.
Because interest rates are so abnormally low, even after a brief respite from the collapse in yields, investors are hunting for the kind of income that REITs offer today.
REITs are more insulated from volatility caused by an event like the Saudi oilfield attack.
As long as the REIT pays the dividend, investors will not part with their shares.
More importantly, the REIT will attract additional buying as investors grow impatient with historically low bond yields.
Now, add a REIT that participates in one of the few growth sectors to own today… cannabis.
Admittedly, pot stocks have stumbled over the last six months.
Stocks in the group had hit historical highs earlier in the year, only to fall hard in the last three months.
I’ve written before how impossible it is to invest in cannabis stocks with a short-term outlook. Do higher oil prices in the wake of the Saudi news change anything in the dynamic future of cannabis?
No, of course not.
The future of cannabis is entirely insulated from whatever noise is happening elsewhere.
Plus, that pullback in pot stocks opens the door to a tremendous opportunity for today’s investor.
When combined with owning a cannabis REIT that pays a steady dividend, the ingredients are in place for the combination of income and growth.
You just don’t see both in the market today, at least not very often.
This is the best marijuana REIT you can buy today…
The Best Marijuana REIT Combines Huge Upside and a Solid Dividend
Shares of cannabis REIT Innovative Industrial Properties Inc. (NYSE: IIPR) are down 33% since May, presenting us with an excellent entry point.
The company has a genius model for participating in the ongoing cannabis boom. It owns the real estate that is used for cannabis production.
With capital at a premium, IIPR offers those in the cannabis space an alternative to expensive real estate, including the facilities on the land.
Such a model ensures that the company is not at risk for the ups and downs of selling marijuana. As long as there is activity and business in the space, the company will do well.
Despite only a handful of states in the U.S. having fully legalized marijuana, revenue and profits at Innovation are exploding.
The company is expected to nearly double profits from the current year to the next. At current prices, shares of Innovative trade for just 50 times current year estimated earnings.
It should be a significantly higher multiple.
Think about the activity in the industry when full legalization comes…
While there may be only a handful of winners, there will be far more that try to win.
That means duplicative faculties in each and every market where marijuana is legalized.
For Innovative, that competition for the next several years will fill coffers enough to more than pay the dividend.
At the moment, Innovative pays a dividend of 3.42%. With higher cash flows, investors can expect that number to increase.
And with higher profits and a higher dividend, the company will attract more investors. Naturally, that will bid up the share price.
A double (or more) is within the realm of possibility.
Where else can an investor buy a stock that has that type of growth and income potential?
Use the 33% discount over the last few months to acquire shares today.
Illinois Becomes the 11th State to Legalize Cannabis (Making More People Rich)
Cannabis laws are being reformed en masse: Illinois has not only become the 11th – and second largest – state to legalize marijuana, but the first to do so by way of state legislation.
That means the medical, personal, and economic benefits of “America’s Green Gold Rush” are appealing to Republicans and Democrats alike.
One cannabis research executive is hailing Illinois the “Marijuana Mecca of the Midwest,” a hallmark of the rising uncapped profit potential ahead.
Once the federal government ends cannabis prohibition nationwide, all bets will be off – demand will boost share prices through the roof. But you can still get in on the ground floor, just in time for what could be the windfall of the century.
Illinois is already housing some of our top picks in the industry, so a few of our favorite stocks could get yet another boost.
About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.
Disclaimer: © 2019 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.