REIT stocks are a great way to add income generating stocks to your portfolio and diversify your risk by adding another stable asset class to your portfolio. REITs, known as Real Estate Investment Trusts, are attractive to investors because these companies generate earnings tax free and must pay at least 90% of their earnings as dividends. They acquire properties then lease them to tenants and earn passive monthly income.
National Storage Affiliates (NYSE: NSA) is one of the newer and upcoming REITS to IPO in the last couple of years. They are aggressively growing their self-storage facilities portfolio and have returned a handsome 126% return to investors since they went public. They are currently the 6th largest self storage REIT in America and continue to acquire more storage properties year over year.
Q1 2019 Highlights
Here are some highlights from the recent Q1 2019 earnings release:
- EPS was 8 cents for the 1st quarter
- Core FFO of 37 cents, a 15.6% compared to Q1 2018
- Same store net operating income grow 6.7%
- Acquired 32 self storage properties
The company is growing fast and pays a nice healthy 4% quarterly dividend to shareholders. As Americans continue to spend more money on storage space, this makes National Storage Affiliates a relatively recession proof because as long as the American population grows over time.
We’ve seen similar trends with self storage companies like Public Storage (PSA) who continue to grow over time by adding storage units and servicing their customers. However, self-storage REIT growth in the major cities is stalling while suburban and rural markets offer a more attractive ROI. One of NSA’s strategies is to acquire storage properties in non-urban cities, giving them a good advantage over their bigger competitors.
Is National Storage Affiliates a Good Stock to Buy?
Trading at just under $30 as of writing this article, I think NSA is a wonderful opportunity for REIT investors who want to buy REITs with steady income and growth potential. As NSA grows, the dividend yield should shrink while the share price may increase as they acquire more properties. This is a classic sign among REIT stocks but a good sign that the company is growing, not stagnant.
Disclosure: I do not own shares of National Storage Affiliates however I am strongly considering a position in their company. I do not receive any compensation for writing this article.
While his background is mostly related to trading stocks, he recently gained interest in real estate crowdfunding with Fundrise.