2024-08-04 08:48:00 ET
Public Storage (NYSE: PSA) is one of the top companies in the real estate investment trust (REIT) space. It's the industry leader in the self-storage sector, with 3,369 properties comprising 243 million square feet of rentable space across 40 states.
Like most REITs , Public Storage is known more for using its free cash flow to pay dividends (it currently yields 4%, well above the S&P 500's 1.3% average). However, the top self-storage REIT believes its shares trade at such an attractive value right now that it recently used some of its financial flexibility to buy back $200 million of its stock. Here's why the REIT thinks it's a great investment right now.
Public Storage has grown briskly over the years. The REIT's same-store net operating income (NOI) has increased at a 4.9% compound annual rate since 2004, much faster than the core commercial real estate sector's average of 3%. The company has benefited from durable, steadily rising demand for self-storage space, which has kept its occupancy levels high while enabling the REIT to raise rental rates steadily . It has also benefited from its growing scale and operating efficiency gains, which have helped it to deliver sector-leading NOI margins.
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This Top 4%-Yielding Dividend Stock Believes It's a Great Buy Right Now