CubeSmart Leads Self-Storage Niche In Dividend Growth

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Self-storage companyCubeSmart ( CUBE ) has been increasing its dividend since early 2011.

The quarterly dividend payout rose from 2.5 cents a share in 2010 to 13 cents a share in January and April.

This gives CubeSmart the best dividend growth rate among the self-storage stocks, but it carries an asterisk. CubeSmart slashed its dividend twice during the recession.

The current dividend works out to an annualized yield of 2.9%, which is the lowest vs. three other storage stocks in the Finance-Property REIT industry group.

The three other stocks areExtraSpace Storage ( EXR ),Public Storage ( PSA ) andSovran Self Storage ( SSS ).

Apart from the best dividend growth rate of the four, CubeSmart has the best up-down volume ratio -- 1.7 which is well above the neutral 1.0.

CubeSmart is working on a first-stage base.

As a stock advances, it pauses to consolidate. A breakout from a first- or second-stage base is more likely to work than those from later-stage bases.

The stock cleared an 18.18 buy point in a handle April 15, but there were three drawbacks. The market was in correction; volume didn't meet the desired 40% minimum increase; and the handle was low in the base. Research shows that a breakout from a low handle is more likely to fail.

However, CubeSmart could get a second shot. The stock is sketching a new handle with an 18.76 buy point.

Funds from operations increased 32%, 10% and most recently 25% in the past three quarters. Revenue stepped up 19%, 14% and 17% in the same period.

Demand for storage is tied to people moving, discretionary spending and the general economy. Rates for storage units have been rising, CEO Chris Marr said Friday, as he discussed the latest results. The entire industry is doing well, Marr said.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: CUBE , EXR , PSA , SSS

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