Stock Entry Point Article

Extra Space Storage Inc – Best Real Estate Stocks For 2020

Real estate is a sector that struggled during the initial phases of the pandemic outbreak. However, it has bounced back strongly in the last few months with homebuilder stocks performing very well. However, REITs are also an interesting segment to find dividend-yielding stocks. Among the top REIT stocks to buy now is Extra Space Storage. This REIT invests in self-storage units. It owns or operates an area of 140 million square feet and is the second-largest owner of self-storage units in the US. Extra Space Storage has seen its earnings grow 16X over the past decade as demand for self-storage has grown significantly.

Q22020 earnings saw marginal FFO growth

Extra Space Storage reported its Q22020 earnings on 5th August 2020. Funds from operations were up marginally from $165 million to $166 million. Net income attributable to shareholders came in slightly lower at $0.8 per share as opposed to $0.81 per share in the same quarter the previous year. Same-store rental revenues were 3.1% lower on a year-on-year basis at $262 million as compared to $271 million in the same quarter the previous year. However, the same-store square foot occupancy increased from 93.5% in Q22019 to 94.5% in Q22020.

According to CEO Joseph Margolis, “Our platform is able to find and capture high-value customers. Rentals have normalized and vacates remain muted. As a result, our occupancy is at an all-time high and prices have begun to move in the right direction. Where we can, we have resumed more normal pricing, operational practices and auctions.”

Stock performances of the Top REIT Stocks To Buy Now

Extra Space Storage’s stock is up about 12% for the year 2020. It is up 57% since hitting a low on March 23rd, 2020. On a 5-year basis, the stock has gained 47%. Prologis, a logistics REIT, is up 12% for the year 2020 and up 57% since the March market crash. The REIT is often considered to be one of the best and its performance is very similar to that of Extra Space Storage. On a 5-year basis, Prologis is up 132% and has outperformed Extra Space Storage.

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