ExtraSpace Storage (
), a real estate investment trust that specializes in rental
storage space, got a shot in the arm Friday following an earnings
report that Wall Street liked.
Funds from operations, the REIT equivalent of earnings,
reported after Thursday's close came in at 57 cents a share
excluding items, 27% above the year-ago number. Revenue was
$141.9 million, a 25% increase. That missed analysts' FFO
estimates by 3 cents, but beat handily on revenue. Forecasts had
called for $134.5 million. The stock finished the week higher and
not far off an all-time high.
Salt Lake City-based ExtraSpace owns, manages or is in a joint
venture with another party with 1,007 storage facilities in 35
states, the District of Columbia and Puerto Rico. It has 550,000
storage units and 59 million square feet of rentable storage
space. People and businesses can rent space, indoor or outdoor,
for personal effects, boats or RVs.
It's a competitive market, withPublic Storage (
), andSovran Self Storage (
) strong contenders. All have recovered well from the financial
crisis and are trading near new highs.
ExtraSpace offers a 40-cent quarterly dividend, which works
out to a 3.4% yield. FFO dipped in 2009, but have recovered with
four straight years of growth. The same with dividends. In 2004,
the company paid out 11.13 cents, which rose steadily until the
financial crisis, when the company was forced to cut it. It's now
back on the growth path, having increased its dividend from 10
cents in 2010.
Analysts remain optimistic about ExtraStorage, forecasting 13%
FFO growth in 2014 and 9% in 2015.
ExtraStorage has made $1.5 billion in acquisitions in the past
six years and is expanding existing properties where it can.
At the same time, it's paying down long-term debt from 128% of
equity three years ago to 98% last year.