PSA - This Is One of the Safest Dividend Stocks Around
Public Storage (NYSE: PSA) might not stand out as a top-tier dividend stock at first. While its 2.3% dividend yield is higher than the 1.5% of S&P 500 , it's below the more than 3% average across the real estate investment trust (REIT) sector. Meanwhile, the REIT hasn't increased its dividend payment since 2017.
However, what does stand out is Public Storage's dividend safety profile, which is one of the strongest in the REIT sector. Because of that, it's an excellent option for those seeking an ultra-low-risk dividend stock.
There are many ways to measure dividend safety. Public Storage passes each one with flying colors. For starters, the self-storage REIT generates very resilient rental income. While most self-storage leases are month-to-month, tenants tend to stay for a while. Public Storage noted on its second-quarter conference call that the average length of stay is now 39 months. Meanwhile, demand for self-storage space is resilient, staying relatively steady even during a recession. Because of that, occupancy levels and rental rates typically hold up reasonably well throughout the economic cycle, enabling the REIT to generate stable rental income.
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This Is One of the Safest Dividend Stocks Around