Shares of Extra Space Storage Inc. EXR were down 0.45% on broader market concerns during Thursday’s regular trading session. The fall came despite the announcement of a 25.5% dividend hike the previous day.
This storage real estate investment trust (“REIT”) declared a dividend of 59 cents per share, up from 47 cents paid earlier. The increased dividend will be paid on Jun 30, 2015 to shareholders of record as on Jun 15.
Based on the increased rate, the annualized dividend comes to $2.36 per share, leading to an annualized yield of about 3.3%, considering Extra Space's closing price of $70.64 on May 28.
Extra Space Storage is the second largest owner and/or operator of self-storage space in the U.S. The company’s tally of self-storage properties, owned and/or operated by it, stood at 1,106 in 35 states. The company’s portfolio comprises around 740,000 units spanning approximately 81.8 million square feet of rentable storage space.
This Salt Lake City-based REIT has been a steady performer, beating the Zacks Consensus Estimate in 3 out of the last 4 quarters. The company reported an earnings surprise of 2.99% in the last reported quarter and an average surprise of 3.42% over the trailing four quarters.
We believe Extra Space Storage’s robust operating platform and efficient management team will help it to execute its strategic priorities, ride the growth curve and reward shareholders simultaneously.
Solid dividend payouts are arguably the biggest enticement for REIT investors as the U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividends to shareholders.
Currently, Extra Space Storage carries a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider stocks like First Industrial Realty Trust Inc. FR, Gladstone Land Corporation LAND and Kilroy Realty Corp. KRC. All these stocks hold a Zacks Rank #2 (Buy).
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