Investing Experts
NewLake Capital, IIPR and cannabis REITs
May 30, 2024
Bengal Capital's Jerry Derevyanny and Julian Lin discuss NewLake Capital and cannabis REITs, highlighting valuation trends and redeployment risks. They delve into the impact of lease expirations on yields and analyze the effects of legalization on pricing and leverage in the industry.
09:03
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Quick takeaways
- Valuations in cannabis REITs are up, yields are down, signaling potential risks for investors.
- Legalization shifts could impact REIT valuations, emphasizing the need for constant evaluation and strategic positioning.
Deep dives
Evaluation of REITs Dividend Yields
UA Capital is currently trading at an 8% dividend yield, presenting an interesting valuation compared to traditional REITs around 5.5%. The dynamic nature of valuation impacts the risk profile for net lease REITs like UA Capital as their valuations expand. The historical execution of UA Capital stands out due to their strategic stock buyback approach during low valuations, showcasing efficient capital deployment and high cash flow margins.
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