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Extra Space Storage Inc's Dividend Analysis

Exploring the Sustainability and Growth of Dividends

Extra Space Storage Inc (NYSE:EXR) recently announced a dividend of $1.62 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-06-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Extra Space Storage Inc's dividend performance and assess its sustainability.

What Does Extra Space Storage Inc Do?

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Extra Space Storage is a fully integrated real estate investment trust that owns, operates, and manages almost 3,700 self-storage properties in 42 states, with over 280 million net rentable square feet of storage space. Of these properties, approximately one half is wholly owned, while some facilities are owned through joint ventures and others are owned by third parties and managed by Extra Space Storage in exchange for a management fee.

Extra Space Storage Inc's Dividend Analysis
Extra Space Storage Inc's Dividend Analysis

A Glimpse at Extra Space Storage Inc's Dividend History

Extra Space Storage Inc has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis. Since 2009, Extra Space Storage Inc has increased its dividend each year, earning it the status of a dividend achiever. This accolade is reserved for companies that have increased their dividends annually for at least the past 15 years.

Extra Space Storage Inc's Dividend Analysis
Extra Space Storage Inc's Dividend Analysis

Breaking Down Extra Space Storage Inc's Dividend Yield and Growth

As of today, Extra Space Storage Inc currently has a 12-month trailing dividend yield of 3.08% and a 12-month forward dividend yield of 4.10%, indicating an expectation of increased dividend payments over the next 12 months. Over the past three years, the annual dividend growth rate was 21.60%, decreasing to 15.60% over a five-year period and 14.50% over the past decade.

Based on the current dividend yield and five-year growth rate, the 5-year yield on cost for Extra Space Storage Inc stock is approximately 6.36%.

Extra Space Storage Inc's Dividend Analysis
Extra Space Storage Inc's Dividend Analysis

The Sustainability Question: Payout Ratio and Profitability

To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of 2024-03-31, Extra Space Storage Inc's dividend payout ratio is 1.35, which may suggest concerns about the sustainability of the company's dividend. However, Extra Space Storage Inc's profitability rank of 9 out of 10, combined with a decade of positive net income, underscores robust profitability prospects.

Growth Metrics: The Future Outlook

Extra Space Storage Inc's growth rank of 9 out of 10 illustrates a strong growth trajectory relative to its competitors. The company's revenue per share and 3-year revenue growth rate of 13.10% annually outperforms approximately 78.57% of global competitors. Furthermore, the 3-year EPS growth rate of 12.80% per year and a 5-year EBITDA growth rate of 15.30% also indicate strong performance.

Concluding Insights on Dividend Sustainability

Considering Extra Space Storage Inc's consistent dividend payments, robust dividend growth rate, manageable payout ratio, and strong profitability and growth metrics, the company presents a compelling case for dividend investors. The balance of growth and profitability suggests that the dividends are not only sustainable but also poised for future growth. For those seeking high-dividend yield stocks, consider using the High Dividend Yield Screener available to GuruFocus Premium users.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.