We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Hold On to Extra Space (EXR) Stock Now
Read MoreHide Full Article
Extra Space Storage Inc. (EXR - Free Report) has earned a solid recognition in the self-storage industry. The company focuses on expansion of its geographical footprint through accretive acquisitions and third-party management platforms. It enjoys solid presence in key cities and opts for strategic joint ventures to boost long-term profitability.
The company significantly expanded its business in recent years, growing the branded store count from 820 in 2010 to 1,852 in first-quarter 2020. Also, total stores managed for third-party owners increased from 160 to 676 during the same period.
In addition, Extra Space Storage has spent $6.8 billion in acquisitions in the past 10 years. The company has gained an increased scale in several core markets on these acquisitions as well as fortified its presence in a number of new markets.
These efforts have helped this Salt Lake City, UT-based self-storage real estate investment trust (REIT) emerge as the second-largest self-storage operator and the largest self-storage management company in the United States. The majority of its stores are gathered around large population centers. Apart from having above-average population, these markets enjoy favorable income demographics for stores. Therefore, with a geographically-diversified portfolio and significant scale, the company is poised for long-term growth.
Also, the self-storage asset category is basically need-based and recession-resilient in nature. This asset class has low capital-expenditure requirements and generates high operating margins. Additionally, the self-storage industry continues to benefit from favorable demographic changes. Specifically, migration and downsizing trend, and increase in the number of people renting homes have escalated the needs of consumers to rent spaces at a storage facility to park their possessions.
Extra Space Storage also remains focused on improving its balance sheet. The company exited first-quarter 2020, with $93.3 million of cash and cash equivalents, up from the $65.7 million recorded at the end of 2019. It had $546 million in revolving line of credit availability as of Mar 31, 2020. As of Mar 31, 2020, the company's percentage of fixed-rate debt to total debt was 78.3%. The company had $298.6 million available for issuance under its ATM program as of Mar 31, 2020. Extra Space Storage made efforts to delever its balance sheet and achieved a BBB stable rating from S&P in 2019. With solid balance-sheet strength, it remains well poised to capitalize on external growth opportunities which will likely increase.
However, the coronavirus pandemic has been wreaking havoc and the self-storage market too has not been immune to this. In the short term, lower walk-in traffic might hurt rental activity and occupancy levels. Furthermore, stress on customers’ financial capacity will likely result in rent collection issues. As such, same-store rental income and net operating income are expected to be affected in the near term. Moreover, elevated property tax and marketing expense is concerning.
Also, Extra Space Storage operates in a highly fragmented market in the United States, with intense competition from numerous private, regional and local operators. In addition, there has been a development boom of self-storage units in many markets. This high supply is likely to fuel competition, curb its power to raise rents and turn on more discounting.
Alexander Baldwin Holdings, Inc.’s (ALEX - Free Report) Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has been unchanged at 83 cents over the past month. The company currently flaunts a Zacks Rank of 1 (Strong Buy).
One Liberty Properties, Inc.’s (OLP - Free Report) FFO per share estimate for the ongoing year has been unchanged at $1.89 over the past 30 days. The company currently flaunts a Zacks Rank of 1.
Gladstone Land Corporation’s (LAND - Free Report) FFO per share estimate for 2020 has moved 3% upward to 68 cents over the past month. Further, it currently carries a Zacks Rank of 2 (Buy).
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Image: Shutterstock
Here's Why You Should Hold On to Extra Space (EXR) Stock Now
Extra Space Storage Inc. (EXR - Free Report) has earned a solid recognition in the self-storage industry. The company focuses on expansion of its geographical footprint through accretive acquisitions and third-party management platforms. It enjoys solid presence in key cities and opts for strategic joint ventures to boost long-term profitability.
The company significantly expanded its business in recent years, growing the branded store count from 820 in 2010 to 1,852 in first-quarter 2020. Also, total stores managed for third-party owners increased from 160 to 676 during the same period.
In addition, Extra Space Storage has spent $6.8 billion in acquisitions in the past 10 years. The company has gained an increased scale in several core markets on these acquisitions as well as fortified its presence in a number of new markets.
These efforts have helped this Salt Lake City, UT-based self-storage real estate investment trust (REIT) emerge as the second-largest self-storage operator and the largest self-storage management company in the United States. The majority of its stores are gathered around large population centers. Apart from having above-average population, these markets enjoy favorable income demographics for stores. Therefore, with a geographically-diversified portfolio and significant scale, the company is poised for long-term growth.
Also, the self-storage asset category is basically need-based and recession-resilient in nature. This asset class has low capital-expenditure requirements and generates high operating margins. Additionally, the self-storage industry continues to benefit from favorable demographic changes. Specifically, migration and downsizing trend, and increase in the number of people renting homes have escalated the needs of consumers to rent spaces at a storage facility to park their possessions.
Extra Space Storage also remains focused on improving its balance sheet. The company exited first-quarter 2020, with $93.3 million of cash and cash equivalents, up from the $65.7 million recorded at the end of 2019. It had $546 million in revolving line of credit availability as of Mar 31, 2020. As of Mar 31, 2020, the company's percentage of fixed-rate debt to total debt was 78.3%. The company had $298.6 million available for issuance under its ATM program as of Mar 31, 2020. Extra Space Storage made efforts to delever its balance sheet and achieved a BBB stable rating from S&P in 2019. With solid balance-sheet strength, it remains well poised to capitalize on external growth opportunities which will likely increase.
However, the coronavirus pandemic has been wreaking havoc and the self-storage market too has not been immune to this. In the short term, lower walk-in traffic might hurt rental activity and occupancy levels. Furthermore, stress on customers’ financial capacity will likely result in rent collection issues. As such, same-store rental income and net operating income are expected to be affected in the near term. Moreover, elevated property tax and marketing expense is concerning.
Also, Extra Space Storage operates in a highly fragmented market in the United States, with intense competition from numerous private, regional and local operators. In addition, there has been a development boom of self-storage units in many markets. This high supply is likely to fuel competition, curb its power to raise rents and turn on more discounting.
Shares of this Zacks Rank #3 (Hold) company have depreciated 2.5% so far in the year, narrower than the 2.8% decline of its industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Alexander Baldwin Holdings, Inc.’s (ALEX - Free Report) Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has been unchanged at 83 cents over the past month. The company currently flaunts a Zacks Rank of 1 (Strong Buy).
One Liberty Properties, Inc.’s (OLP - Free Report) FFO per share estimate for the ongoing year has been unchanged at $1.89 over the past 30 days. The company currently flaunts a Zacks Rank of 1.
Gladstone Land Corporation’s (LAND - Free Report) FFO per share estimate for 2020 has moved 3% upward to 68 cents over the past month. Further, it currently carries a Zacks Rank of 2 (Buy).
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>