An in-depth analysis of Public Storage's dividend history, yield, growth, and future prospects
Public Storage (PSA, Financial) recently announced a dividend of $3 per share, payable on 2023-09-28, with the ex-dividend date set for 2023-09-12. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Public Storage's dividend performance and assess its sustainability.
What Does Public Storage Do?
Public Storage is the largest owner of self-storage facilities in the U.S. with more than 2,880 self-storage facilities in 40 states and approximately 200 million square feet of rentable space. Through equity interests, it also has exposure to the European self-storage market through Shurgard Self Storage. The company also has a merchandise business, a third-party property management business, and an insurance business that offers products to cover losses for the goods in self-storage facilities.
A Glimpse at Public Storage's Dividend History
Public Storage has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Public Storage has increased its dividend each year since 1992. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 31 years.
Breaking Down Public Storage's Dividend Yield and Growth
As of today, Public Storage currently has a 12-month trailing dividend yield of 3.63% and a 12-month forward dividend yield of 4.35%. This suggests an expectation of increased dividend payments over the next 12 months. And over the past decade, Public Storage's annual dividends per share growth rate stands at 5.90%.
Based on Public Storage's dividend yield and five-year growth rate, the 5-year yield on cost of Public Storage stock as of today is approximately 3.63%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Public Storage's dividend payout ratio is 0.43.
Public Storage's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Public Storage's profitability 9 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Public Storage's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Public Storage's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Public Storage's revenue has increased by approximately 13.20% per year on average, a rate that outperforms than approximately 88.59% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Public Storage's earnings increased by approximately 47.70% per year on average, a rate that outperforms than approximately 86.96% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 20.50%, which outperforms than approximately 80.28% of global competitors.
Next Steps
In conclusion, Public Storage's consistent dividend payments, impressive growth rate, reasonable payout ratio, high profitability, and robust growth metrics indicate that its dividends are not only sustainable but potentially poised for growth in the future. As the company continues to thrive in its industry, investors can look forward to potentially higher returns from their investments. Always remember, thorough research and due diligence are key to making informed investment decisions.
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