ExtraSpace Storage Up After Quarterly Report


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ExtraSpace Storage ( EXR ), 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 ( PSA ),CubeSmart ( CUBE ), andSovran Self Storage ( SSS ) 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.

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

This article appears in: Investing Investing Ideas
Referenced Stocks: EXR , PSA , CUBE , SSS

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