National Storage Affiliates Stock Is Great for Income & Growth
National Storage Affiliates Trust Raises Dividend for 4 Straight Quarters
Some stocks are amazing for share-price growth, others for income. One overlooked stock that has been providing both spectacular growth and income since it went public in 2015 is National Storage Affiliates Trust (NYSE:NSA).
The real estate investment trust (REIT) is one of the largest owners and operators of self-storage facilities in the U.S. (among public and private companies). Since its initial public offering (IPO) in April 2015, NSA stock has soared by 551%. Moreover, management has raised National Storage Affiliates stock’s quarterly dividend 16 times over the last seven years. Most recently, the company has raised its payout for the last four consecutive quarters.
Not only that, things are going so well for National Storage Affiliates that, in February, the company announced the largest increase to NSA stock’s quarterly dividend since its IPO. The REIT declared a dividend of $0.50 per share, for a yield of 3.2%. (Source: “National Storage Affiliates Trust Announces Largest Increase in Quarterly Common Dividend Since IPO,” National Storage Affiliates Trust, February 24, 2022.)
This new payout level represents an 11% increase from the previous quarter ($0.45) and a 43% increase from the first quarter of 2021 ($0.35). (Source: “Dividend History,” National Storage Affiliates Trust, last accessed March 30, 2022.)
Admittedly, a 3.2% yield isn’t going to get dividend hogs all excited, but when coupled with National Storage Affiliates stock’s share-price compound annual growth rate (CAGR) of 30.7%, it’s a beautiful marriage.
Chart courtesy of StockCharts.com
About NSA Stock
National Storage Affiliates is a self-administered, self-managed REIT that owns, operates, and acquires self-storage facilities. It’s the third-largest U.S storage REIT.
Through ongoing contributions from its participating regional operators (PRO), third-party acquisitions, and joint ventures, the company currently holds ownership interests in and operates 1,050 self-storage properties in U.S. 42 states plus Puerto Rico. Of those properties, 873 are wholly owned and 177 are joint ventures. (Source: “National Storage Affiliates Company Update,” National Storage Affiliates Trust, last accessed March 30, 2022.)
The REIT’s internal brands are “SecurCare,” “Northwest,” and “iStorage.” Its PROs and joint ventures operate under several other brand names. (Source: “Meet the PROs and Corporate Brands,” National Storage Affiliates Trust, last accessed March 30, 2022.)
National Storage Affiliates Trust’s properties cover 67.8 million rentable square feet. That’s the equivalent of about 1,177 NFL football fields.
One of the benefits of National Storage Affiliates stock is the company’s diverse market exposure. Approximately two-thirds of the company’s properties are located outside of the top 20 metropolitan areas. The highest concentration of the company’s storage units is in Texas, California, Florida, Oregon, and Georgia. The geographic diversity protects it from risks associated with specific regional economies.
Record 2021 Results
Thanks to high demand and industry tailwinds, National Storage Affiliates reported record financial results for the year ended December 31, 2021.
This included fourth-quarter net income growth of 75.0% to $42.9 million, or $0.25 per share. The company’s core funds from operations (FFO) in the quarter went up by 39.1% year-over-year to $78.9 million, or $0.64 per share. Its same-store net operating income (NOI) in the quarter advanced 21.7% year-over-year, driven by a 17.4% increase in same-store total revenues. (Source: “National Storage Affiliates Trust Reports Fourth Quarter and Full Year 2021 Results,” National Storage Affiliates Trust, February 22, 2022.)
It also reported period-end same-store occupancy of 94.8%, an increase of 310 basis points compared to December 31, 2020.
During the fourth quarter, National Storage Affiliates Trust acquired 110 wholly-owned self-storage properties for over $1.1 billion.
The REIT’s full-year net income went up by approximately 85% year-over-year to $146.9 million, or $0.98 per share. Its 2021 core FFO climbed by 32.2% year-over-year to $257.3 million, or $2.26 per share. Its 2021 same-store NOI increased by 19.8% year-over-year, driven by a 15.1% increase in same-store total revenues.
During the full year, the company acquired 229 wholly-owned self-storage properties for approximately $2.2 billion.
The strong full-year results and robust outlook aren’t a one-off event. National Storage Affiliates has a history of outperforming its peers when it comes to average same-store revenue growth, average same-store NOI growth, average core FFO-per-share growth, and total shareholder returns.
For 2022, National Storage Affiliates Trust expects to report:
- Core FFO per share in the range of $2.68 to $2.75
- Earnings per share in the range of $1.12 to $1.22
- Total revenue growth in the range of 8.0% to 9.5%
- NOI growth in the range of 9.0% to 11.0%
- Acquisitions in the range of $400.0 and $600.0 million
The Lowdown on National Storage Affiliates Stock
For National Storage Affiliates Trust, 2021 was a record-setting year.
The REIT invested $2.2 billion in 229 self-storage properties and eclipsed the 1,000-store milestone. Its property operating results exceeded the company’s already lofty expectations and achieved same-store NOI growth of 20% year-over-year. National Storage Affiliates delivered core FFO growth per share of 39% in the fourth quarter and 32% in full-year 2021. That represents the company’s largest core FFO-per-share growth since it went public in 2015.
Best of all, management expects the momentum to continue, which is good news for NSA stockholders.