These are five dividend-paying marijuana stocks for more predictable portfolio returns

Given the intensifying growth in the cannabis equities market in both Canada and the United States from shifting regulations, it would not surprise many investors that dividend-paying marijuana stocks are more difficult to find than in other more seasoned industries. High-yield dividend stocks are typically reserved for more mature, stable, profitable companies where management feels future growth will be limited. In general, this does not describe marijuana-focused businesses which need to keep their earnings to perpetuate business expansion.

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While Marijuana industry investors are more likely to be growth-focused and therefore might prefer companies reinvesting in themselves more so than sharing earnings with stockholders, there are a number of reasons a cannabis stock investor might be interested in dividend-yielding marijuana stocks.

  • Dividend payments can mitigate the risk of losses that occur from a declining stock price. Negative regulatory news has the power to crush marijuana-focused businesses, so having a predictable cash flow in the form of dividends can ease some of that risk.

  • Dividend-paying stocks significantly outperform non-dividend-paying stocks during bear market periods. Especially if the marijuana industry takes a dive, this can be attractive to investors.

  • Owning dividend-paying stocks reduces portfolio volatility.

  • Investors might enjoy the instant gratification that comes along with the tangible nature of cash payouts.

  • Stocks which carry dividends are typically more stable and mature than non-dividend-yielding growth stocks.

  • For companies to share earnings with stock owners in the form of dividend payments, this naturally assumes they do in fact have earnings to share with investors. Given that many marijuana-focused stocks do not yet have positive earnings, this can be especially attractive to investors.

Here are five marijuana-focused stocks currently paying a dividend to shareholders:

Compass Diversified Holdings Inc., 8.16 Percent Dividend Yield

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Compass Diversified Holdings (NYSE:CODI) comes in as the highest-yielding stock on this list. Compass Diversified Holdings is a private equity firm in middle market investments in North America. It owns a large share in Manitoba Harvest, a hemp food producer as well as in Hemp Oil Canada. It currently has a Market Cap of $1.056B (USD) and last paid a $.36 per share quarterly dividend on 7/18/2018, resulting in an 8.16 percent annual dividend yield.

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While the high yield might appear attractive at first glance, investors should analyze the company fundamentals and growth potential to ensure it is a sound investment.

AbbVie Inc., 3.93 Percent Dividend Yield

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AbbVie (NYSE:ABBV) is a United States-based pharmaceutical firm that has consistently delivered positive earnings and increasing revenue streams each year. The company produces Marinol which is a marijuana-based drug to reduce nausea and stimulate hunger in those with AIDS.

The company has a Market Cap of $147.853B (USD) and pays a quarterly dividend to shareholders. The most recent dividend payment was $.96 per share, giving a 3.93 percent annual dividend yield.

Alcanna Inc., 3.88 Percent Dividend Yield

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Alcanna (OTCMKTS:LQSIF) runs liquor stores in Canada and the United States but recently began focusing more on the Canadian market as a marijuana retailer. One of the largest cannabis producers, Aurora Cannabis (OTCMKTS:ACBFF) also owns 25 percent ownership interest in Alcanna following a buyout earlier this year.

[Read More: Cuomo To Legalize Cannabis In New York]

Despite having negative EPS recently, Alcanna currently pays a 3.88 percent annual dividend with the last quarterly dividend payment on 6/28/2018 at $.067 per share.

Scotts Miracle-Gro Company, 2.91 Percent Dividend Yield

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Scotts Miracle-Gro (NYSE:SMG) is a general garden supply company, but in recent years it has taken an interest in providing products for the Cannabis industry. The company recently signed an agreement to purchase Sunlight Supply which specializes in hydroponics, a popular means to grow cannabis.

The company is currently paying a quarterly dividend with the last dividend payment on 5/24/2018 at $.53 per share, yielding 2.91 percent dividend yield.

Innovative Industrial Properties Inc., 2.90 Percent Dividend Yield

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Innovative Industrial Properties, Inc (NYSE:IIPR) is a United States-based REIT focused on investing in medical-use cannabis facilities. It has seen strong stock returns of over 115 percent over the last year and has been considered a “Strong Buy” stock by analysts in recent months.

The stock currently pays a $.25 dividend per share, yielding an annual dividend yield of 2.90 percent.

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