Is Extra Space Storage Inc. (EXR) The Best Self Storage and Apartment Stock to Invest In?

Extra Space Storage Inc. (EXR) has been a standout performer in the self-storage and apartment sectors, with a strong track record of revenue growth and profitability. As of February 22, 2025, EXR's annual dividend yield is 4.20%, which is higher than the average dividend yield of 3.60% over the past five years. This yield is also higher than the current dividend yields of other REITs and apartment stocks listed in the materials, such as U-Haul (UHAL), SP Plus Corporation (SP), Geo Group (GEO), and Equity LifeStyle Properties (ELS). EXR's dividend yield is also higher than the average dividend yield of the US REIT - Industrial industry, which is 1.54% as of February 22, 2025.

EXR's dividend yield is not only attractive but also sustainable, with a consistent long-term dividend growth. The company's annual dividend per share has increased from $0.48 in 2010 to $6.48 in 2024, representing a compound annual growth rate (CAGR) of approximately 15.5%. This consistent dividend growth, coupled with the company's high dividend yield, makes EXR an attractive option for income-oriented investors compared to other REITs and apartment stocks.

EXR's acquisition strategy has also contributed to its strong financial performance and growth prospects. The company's revenue has grown consistently over the past decade, with an average annual growth rate of 20.36%. This growth can be attributed to EXR's strategic acquisitions, which have expanded its portfolio of self-storage facilities. In 2024 alone, EXR acquired 17 operating stores and three Certificate of Occupancy stores for a total cost of approximately $226.6 million (Source: EXR's Q3 2024 earnings report). EXR's acquisition strategy has also allowed the company to expand into new markets, increasing its geographical diversity and mitigating risks associated with relying on a single market.

EXR's same-store revenue and net operating income (NOI) have also shown consistent growth. In the nine months ending September 30, 2024, same-store revenue increased by 0.4% and same-store NOI decreased by (0.9)% compared to the same period in the prior year. This growth is a result of the company's ability to integrate acquired properties into its portfolio and optimize their performance (Source: EXR's Q3 2024 earnings report).

EXR's occupancy rates have also increased due to its acquisition strategy. As of September 30, 2024, the company reported an ending same-store occupancy of 94.3%, compared to 93.7% as of September 30, 2023. This increase in occupancy is a result of the company's ability to acquire and integrate new properties into its portfolio (Source: EXR's Q3 2024 earnings report).

In conclusion, EXR's dividend yield and payout history, coupled with its strong financial performance and growth prospects, make it an attractive investment option in the self-storage and apartment sectors. The company's acquisition strategy has contributed to its consistent revenue growth, increased occupancy rates, and a strong dividend yield. EXR's high dividend yield and consistent long-term dividend growth make it an attractive option for income-oriented investors compared to other REITs and apartment stocks.