- NSA's earnings have increased sharply in 2021.
- Dividends are up too, but at a slightly lower rate.
- We have attached our favorite chart comparing AFFO levels and dividends. Enjoy!
- NSA has historically had the reputation of being the "yieldy" stock within the self storage universe, essentially paying out nearly all of AFFO in dividends.
- That's changed in 2021 with AFFO/share increasing at a stronger rate than dividends. This has improved dividend coverage and safety.
- NSA declared a $0.45/share dividend for 4Q'21, up 9.8% from 3Q. This is the company's third dividend increase this year. Will the dividend continue to be matched by earnings or is NSA eroding some of its hard-won gains?
- Boom times won't last forever so it's important to start managing expectations now. Storage dividends should be set as low as possible to avoid the inevitable 'hangover' when rental rates start to peak.
Thanks for reading and I look forward to your comments.
Analyst's Disclosure: I/we have a beneficial long position in the shares of NSA either through stock ownership, options, or other derivatives.
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