The Price Is Right: This Weed Real Estate Stock Proves Conservative Strategies Bring Returns
New Lake Capital Partners (OTC:NLCP), a real estate company focused on cannabis properties, offers an attractive investment with a 9.1% dividend yield, well above the return on 10-year government bonds.
This yield, combined with a cautious approach to debt and disciplined portfolio growth, positions NLCP as an attractive alternative to other cannabis REITs like IIPR (NYSE:IIPR) and broader industrial REITs. Trading near par value, NLCP’s conservative strategy highlights its potential for stable, long-term returns, as noted by Pablo Zuanic of Zuanic & Associates.
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Attractive Valuation And Dividend Yield
One of NLCP’s standout features is its 9.1% dividend yield, which is almost 500 basis points (bp) higher than 10-year Treasury bills—the benchmark for low-risk investments.
By comparison, IIPR offers a 6.7% dividend yield but trades at a 57% premium to book value, while NLCP trades at par, reflecting a more conservative approach to valuation.
Zuanic notes this discrepancy – partly due to IIPR’s NYSE listing versus NLCP’s OTC market status -suggests NLCP may be undervalued, with the potential for its valuation to increase as its market recognition grows.
The company’s dividend coverage stands at 120%, demonstrating the …