May 26, 2025 a 07:46 am
EXR: Dividend Analysis - Extra Space Storage Inc.
Extra Space Storage Inc. presents a robust dividend profile reflected by its appealing dividend yield of 4.45%. With over two decades of continuous dividend history, the company illustrates its commitment to shareholder returns. Nevertheless, the high payout ratio merits attention as it implies potential risks in dividend sustainability. Therefore, continuous monitoring of financial health is crucial.
📊 Overview
Extra Space Storage Inc. operates in the Real Estate sector, offering a substantial dividend yield. The company demonstrates a solid dividend history of 22 consecutive years, showcasing its reliability in dividend payments.
| Metric | Value |
|---|---|
| Sector | Real Estate |
| Dividend Yield | 4.45% |
| Current Dividend per Share | 6.50 USD |
| Dividend History | 22 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
The historical dividend payments of Extra Space Storage Inc. underline its persistent endeavors towards rewarding investors. The consistency in dividend payments over the years provides a solid foundation and builds investor confidence.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 3.24 |
| 2024 | 6.48 |
| 2023 | 6.48 |
| 2022 | 6.00 |
| 2021 | 4.50 |
📈 Dividend Growth
Assessing dividend growth offers insight into the ability to increase shareholder returns over time. Extra Space Storage Inc.'s stable growth trend indicates its potential to sustain dividend increases amidst fluctuating market conditions.
| Time | Growth |
|---|---|
| 3 years | 12.92% |
| 5 years | 12.73% |
The average dividend growth is 12.73% over 5 years. This shows moderate but steady dividend growth.
📉 Payout Ratio
The payout ratio is a critical indicator of the sustainability of a company’s dividends. The EPS-based payout ratio reflects the portion of earnings paid to shareholders and suggests potential challenges in maintaining dividend levels without robust earnings growth.
| Key figure | Ratio |
|---|---|
| EPS-based | 150.96% |
| Free Cash Flow-based | 73.92% |
The high EPS payout ratio of 150.96% suggests dividends exceed current earnings, posing risks to sustainability. However, a lower FCF payout ratio of 73.92% indicates room for dividend coverage based on operational cash flows.
✅ Cashflow & Capital Efficiency
Effective cash flow management and capital utilization are vital for maintaining operational flexibility and funding dividends. Here are key financial metrics:
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 5.90% | 5.11% | 6.16% |
| Earnings Yield | 2.70% | 2.96% | 4.36% |
| CAPEX to Operating Cash Flow | 0.00% | 1.14% | 1.84% |
| Stock-based Comp. to Revenue | 0.70% | 1.04% | 1.11% |
| Free Cash Flow / Operating Cash Flow Ratio | 98.91% | 98.86% | 98.16% |
The steady cash flow indicates strong liquidity, supporting dividend payments and potential reinvestment opportunities, though the company must manage its CAPEX commitments judiciously to preserve these advantages.
⚠️ Balance Sheet & Leverage Analysis
Analyzing leverage ratios is essential for understanding debt maturity and borrowing capacity. A comprehensive balance sheet analysis aids in evaluating default risk and financial stability.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.93 | 0.78 | 2.32 |
| Debt-to-Assets | 0.45 | 0.41 | 0.62 |
| Net Debt to EBITDA | 5.97 | 6.22 | 5.63 |
| Current Ratio | 0.93 | 0.85 | 0.07 |
| Quick Ratio | 0.93 | 0.85 | 0.67 |
The improved debt metrics over time signal financial deleveraging and increased stability, enhancing the company's ability to meet its obligations and continue dividend payments, albeit the lower current ratio indicates a tighter short-term liquidity.
📊 Fundamental Strength & Profitability
Profitability measures are critical for assessing operational efficiency and the company's capability to generate sustainable earnings.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 6.13% | 5.58% | 26.40% |
| Net Margin | 26.24% | 31.37% | 44.73% |
| EBIT Margin | 46.94% | 51.16% | 60.35% |
The financial data indicates competence in generating stable returns. Nonetheless, fluctuating profit margins suggest market pressures or operational challenges requiring strategic improvements to maintain profitability.
📉 Price Development
✅ Dividend Scoring System
| Category | Score | Score Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 3 | |
| Payout ratio | 2 | |
| Financial stability | 3 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Overall Score: 29/40
📈 Rating
Extra Space Storage Inc. demonstrates a solid, reliable dividend profile suitable for income-seeking investors, provided they remain mindful of the elevated payout ratio, which could suggest potential headwinds if earnings growth does not catch up. A prudent approach balances appreciation prospects with the necessity for regular review of financial strategies.