A few investors may hope for “set it and forget it” stocks. Unfortunately, considering the inherent volatility and risks that can come with holding stocks, this type of thinking is not suggested with individual stocks.
Even so, stockholders will at times come across companies destined to deliver gains that will last a lifetime. This is because of their customer bases and prospects growing. T-Mobile (NASDAQ:TMUS) and Innovative Industrial Properties (NYSE:IIPR) have the potential for this kind of long-term growth.
1. Industrial Properties that are Innovative
There is only one real estate investment trust (REIT) that specializes solely in buying properties for the cultivation of cannabis for medical use, that trust is IIP. At the moment, it has acquired 55 properties all over the country to be used for this purpose. IIP serves only a small portion of its possible market.
Cannabis companies usually don’t have access to banks because there are federal laws against marijuana sales, IIP has a special role in the industry. To give these companies financing, IIP buys their land and leases it back to the original owner. This led the company to new property acquisitions and has also kept its properties 100% leased.
By using this method, the company made close to $146 million in revenue during the first nine months of the year in 2021, 82 precent higher than they made the first nine months of 2020. The net income for the initial three quarters of 2021 was $85 million, a 94 precent increase from the same time period in 2020. Limiting the operating expenses to 42 precent helped to boost earnings, even with interest costing more than double during that time and the interest income dropped by more than 90 precent.
The stock rose by around 50 precent over the past year because of this success. Furthermore, being a REIT, it has to pay its shareholders at least 90 precent of its net income in dividends. Increasing profits have caused a dividend increase in each one of the past six quarters. Shareholders get a yield of 2.5% now that the dividend is at $6 per share annually.
T-Mobile is one of only three companies providing 5G data service in the U.S., and the impact of the lead that T-Mobile has with 5G is just now starting to be noticed. It continues to beat its rivals, Verizon (NYSE:VZ) and AT&T (NYSE:T) on net account additions, they have reported 1.3 million in just Q3.
T-Mobile has attempted to compete with its rivals when it comes to service quality. It added to its portfolio of wireless spectrum by buying Sprint. Also, back in March, $9 billion was invested by T-Mobile to acquire C-band spectrum. The spectrum compares to “RF real estate,” which will make its service in specific markets better.
This year, T-Mobile is planning to use between $12.1 billion and $12.3 billion in order to upgrade its network. It won the number 1 ranking from J.D. Power for their customer care.
It had a revenue of $59 billion in just the first 3 quarters of 2021, 23 precent higher than during the same time period last year. T-Mobile had $2.6 billion in earnings during the first nine months of the year. That number climbed by 13% from a year ago. With equipment costs increasing by 48 precent, the profit amount fell behind the revenue growth rate.
Author: Scott Dowdy