Financial Analysis: Life Storage (LSI) vs. Extra Space Storage (EXR)
Life Storage (NYSE: LSI) and Extra Space Storage (NYSE:EXR) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, profitabiliy, institutional ownership, risk, analyst recommendations and earnings.
This is a summary of recent ratings for Life Storage and Extra Space Storage, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Extra Space Storage||2||7||2||1||2.17|
Life Storage presently has a consensus target price of $90.27, suggesting a potential upside of 23.85%. Extra Space Storage has a consensus target price of $89.11, suggesting a potential upside of 16.21%. Given Life Storage’s higher probable upside, equities analysts clearly believe Life Storage is more favorable than Extra Space Storage.
Institutional & Insider Ownership
96.3% of Life Storage shares are owned by institutional investors. 2.6% of Life Storage shares are owned by insiders. Comparatively, 3.7% of Extra Space Storage shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Life Storage pays an annual dividend of $4.00 per share and has a dividend yield of 5.5%. Extra Space Storage pays an annual dividend of $3.12 per share and has a dividend yield of 4.1%. Life Storage pays out 227.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Extra Space Storage pays out 108.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Extra Space Storage has raised its dividend for 6 consecutive years.
This table compares Life Storage and Extra Space Storage’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Extra Space Storage||36.40%||14.92%||5.54%|
Valuation & Earnings
This table compares Life Storage and Extra Space Storage’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Life Storage||$458.65 million||7.39||$291.50 million||$1.76||41.42|
|Extra Space Storage||$1.04 billion||9.26||$679.10 million||$2.88||26.63|
Extra Space Storage has higher revenue and earnings than Life Storage. Extra Space Storage is trading at a lower price-to-earnings ratio than Life Storage, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Life Storage has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, Extra Space Storage has a beta of 0.35, indicating that its share price is 65% less volatile than the S&P 500.
Extra Space Storage beats Life Storage on 11 of the 17 factors compared between the two stocks.
Life Storage Company Profile
Life Storage, Inc., formerly Sovran Self Storage, Inc., is a self-administered and self-managed real estate company. The Company acquires, owns and manages self-storage properties. The Company owns its assets and conducts its operations through Life Storage LP (the Operating Partnership) and subsidiaries of the Operating Partnership. As of December 31, 2016, the Company had an ownership interest in and/or managed 659 self-storage properties in 29 states under the names Life Storage and Uncle Bob’s Self Storage. As of December 31, 2016, the Company’s properties were located in various states of the United States, such as Alabama, Arizona, Colorado, California, Florida, Georgia, Maine, Kentucky, Nevada, New Jersey, Ohio, North Carolina, South Carolina, Texas, Utah and Virginia. As of December 31, 2016, the Company’s properties ranged in size from 18,000 to 195,000 net rentable square feet, with an average of approximately 70,000 net rentable square feet.
Extra Space Storage Company Profile
Extra Space Storage Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company owns, operates, manages, acquires, develops and redevelops self-storage properties located throughout the United States. The Company operates through three segments: rental operations; tenant reinsurance, and property management, acquisition and development. The Company’s rental operations activities include rental operations of stores in which it has an ownership interest. The Tenant reinsurance activities include the reinsurance of risks relating to the loss of goods stored by tenants in its stores. The Company’s property management, acquisition and development activities include managing, acquiring, developing and selling stores. The Company’s interest in its stores is held through its operating partnership, Extra Space Storage LP (the Operating Partnership). Its primary assets are general partner and limited partner interests in the Operating Partnership.
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