Life Storage (NYSE: LSI) and Public Storage (NYSE:PSA) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, earnings, risk, profitabiliy, institutional ownership, dividends and valuation.

Analyst Ratings

This is a summary of current recommendations and price targets for Life Storage and Public Storage, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Life Storage 0 9 3 0 2.25
Public Storage 2 8 1 0 1.91

Life Storage currently has a consensus target price of $89.18, indicating a potential upside of 22.98%. Public Storage has a consensus target price of $221.64, indicating a potential upside of 10.00%. Given Life Storage’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Life Storage is more favorable than Public Storage.

Volatility and Risk

Life Storage has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Public Storage has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500.

Insider and Institutional Ownership

96.8% of Life Storage shares are held by institutional investors. Comparatively, 79.6% of Public Storage shares are held by institutional investors. 2.6% of Life Storage shares are held by insiders. Comparatively, 14.4% of Public Storage shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Life Storage pays an annual dividend of $4.00 per share and has a dividend yield of 5.5%. Public Storage pays an annual dividend of $8.00 per share and has a dividend yield of 4.0%. Life Storage pays out 347.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Public Storage pays out 114.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Life Storage has raised its dividend for 7 consecutive years. Life Storage is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Life Storage and Public Storage’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Life Storage $486.76 million 6.93 $301.67 million $1.15 63.06
Public Storage $2.70 billion 12.99 $1.93 billion $7.02 28.70

Public Storage has higher revenue and earnings than Life Storage. Public 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.

Profitability

This table compares Life Storage and Public Storage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Life Storage 10.28% 2.56% 1.38%
Public Storage 53.35% 27.80% 13.85%

Summary

Public Storage beats Life Storage on 9 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.

Public Storage Company Profile

Public Storage is a real estate investment trust (REIT). The Company’s principal business activities include the ownership and operation of self-storage facilities, which offer storage spaces for lease, generally on a month-to-month basis, for personal and business use, ancillary activities, such as merchandise sales and tenant reinsurance to the tenants at its self-storage facilities, as well as the acquisition and development of additional self-storage space. The Company’s segments include Self-Storage Operations, Ancillary Operations, Investment in PS Business Parks, Inc. (PSB) and Investment in Shurgard Europe. As of December 31, 2016, the Company had direct and indirect equity interests in 2,348 self-storage facilities (with approximately 154 million net rentable square feet) located in 38 states in the United States operating under the Public Storage name.

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