For its most recent quarter, this REIT posted FFO of $1.85 per share, beating analysts’ estimates of $1.71 per share. The company also surpassed revenue forecasts, reporting $412.49 million for the quarter. The shares have a current annual dividend yield of 2.53%, paid quarterly.
Extra Space Storage Inc. (EXR)
From Contrarian Outlook
We income-seekers love REITs for a simple reason: high dividends! The typical REIT yields twice as much as the average S&P 500 stock. That’s mainly because these trusts receive reliable recurring revenue—they simply collect the checks that roll in every month, take out enough to maintain the buildings and then send the rest to us.
Consider self-storage REIT ExtraSpace Storage, which is raking in cash as people load up on consumer goods. ExtraSpace yield is already 100% more than the average S&P 500 stock pays, but the REIT has boosted its payout a phenomenal 792% in the last decade. In other words, if you bought back then, you’d be raking in an incredible 22.4% yield on your original buy now.
We can clearly see EXR’s rising payout pulling its share price higher—the pattern is unmistakable.
EXR’s Recurring Revenue Drives Explosive Payout (and Price) Growth
ExtraSpace can easily keep this roll going, with its high 97% occupancy rate and its dividend accounting for a reasonable 76% of forecast 2021 FFO. Plus, management expects the REIT’s FFO to surge 24% this year.
The kicker: the stock is perfectly positioned to gain as supply chain kinks get worked out, giving consumers more products to buy—and store.
Brett Owens, Contrarian Outlook, BNK Invest Inc., 500 North Broadway, Suite 265, Jericho, NY 11753 USA, 516-620-4294, October 26, 2021