Extra Space Storage (EXR) currently offers its shareholders a 3.6% dividend yield and has a record of boosting its annual dividend payout amount for nearly a decade, suggests Ned Piplovic, editor of DividendInvestor.
Based in Salt Lake City, Utah, Extra Space Storage, Inc. operates as a self-administered and self-managed real estate investment trust (REIT). The trust acquires, develops and manages self-storage facilities.
As of November 2018, Extra Space Storage owned approximately 1,600 facilities, comprising more than 1 million individual storage units and with more than 120 million square feet of rentable space.
Since its formation in 2004, the REIT has hiked its annual dividend payout 12 out of the 14 years, or more than 85% of the time.
The only two missed annual hikes were in 2006 when the REIT paid the same $0.91 annual amount as it did in the prior year and 2009 when the total annual dividend amount declined 62% in the aftermath of the 2008 financial crisis.
However, the company has enhanced its total annual dividend distribution amount more than nine-fold since the start of the current streak of consecutive annual hikes in 2010. This level of enhancement is equivalent to an average annual growth rate of nearly 28% per year over the past nine years.
The company’s current yield outperformed the company’s five-year dividend yield average. Additionally, the REIT’s dividend payout ratio has declined from an average of 105% over the past five years to the current 80% level.
The lower payout ratio indicates that the company’s financials should be sufficient to support future dividend distributions and annual payout hikes. Additionally, the technical indicators suggest that the share price might have more room on the upside to grow.
