Back to top

Growth & Income

Extra Space Storage Inc. (EXR - Snapshot Report) recently delivered solid first quarter results as same-store revenue increased thanks to a significant improvement in the occupancy rate.

Management provided encouraging guidance for 2012, prompting analysts to revise their estimates higher for both 2012 and 2013. This sent shares to a Zacks #2 Rank (Buy).

In addition to strong earnings growth, Extra Space Storage pays a dividend that yields an attractive 2.8%.

Company Description

Extra Space Storage Inc. is a real estate investment trust (REIT) that owns and operates 882 self-storage properties in 34 states. It has a market cap of $3.0 billion and is headquartered in Salt Lake City, Utah.

First Quarter Results

Extra Space Storage delivered solid first quarter results on April 30. Funds from operation (FFO) per share was 33 cents, in-line with the Zacks Consensus Estimate. It was a 32% increase over the same quarter last year.

Same-store revenue rose 6.3% year-over-year, driven by a 340 basis point increase in same-store occupancy to 87.1%. Meanwhile, same-store net operating income increased 11% over the same period.


Management provided full year FFO guidance of $1.40-$1.46 per share based on same-store revenue growth of 3.5-5.0%. This prompted analysts to revise their estimates higher for both 2012 and 2013, sending the stock a Zacks #2 Rank (Buy).

The Zacks Consensus Estimate for 2012 is now $1.46, at the upper end of guidance, and representing 18% growth over 2011 FFO. The 2013 consensus is currently $1.64, corresponding with 13% growth.


In addition to strong growth, Extra Space pays a dividend that yields a solid 2.8%.

The company actually cut its quarterly dividend in late 2009 and then again in early 2010. But management raised it by 40% in 2011 and by 43% earlier this year.

It is still 20% below its pre-cut high, however.


Shares currently trade at 2.5x book value, a premium to the industry average of 2.0x. It is trading at 18.6x forward earnings, also above the industry average of 14.0x.

But considering Extra Space Storage's strong earnings momentum, solid growth projections and attractive yield, this premium seems justified.

The Bottom Line

Estimates continue to climb for Extra Space Storage as occupancy rates improve and revenues rise. With double-digit earnings growth on the horizon and a solid 2.8% dividend yield, there is plenty to like.

Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor service.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 27.00 +10.25%
CANADIAN SO… CSIQ 38.34 +8.18%
BANCO DO BR… BDORY 16.78 +8.05%
CENTURY ALU… CENX 26.97 +7.97%
WILLDAN GRO… WLDN 11.38 +5.86%