10Y annualized return is
positive but below market average
at 4.6% per year
PSA has met or exceeded earnings expectations in
some
recent quarters (1/2)
Strong Gross Profit Margin
High Return on Equity
Strong Net Profit Margin
High Operating Profit Margin
Strong Interest Coverage
📈 Strong Operational Stabilization
🏗️ Strategic Investments in Innovation
📊 Diversified Growth Channels
🌟 Improved Market Dynamics
🔋 Digital Transformation and Sustainability
High Price-to-Earnings Ratio
Elevated Price-to-Sales Ratio
High Dividend Payout Ratio
Low Current Ratio
Significant Debt Levels
⚠️ Headwinds from Pricing Restrictions
📉 Competitive Pricing Dynamics
Overall, PSA exhibits strong business quality through operational stabilization, strategic investments, and diversified growth channels. Future prospects remain positive, bolstered by improved market dynamics and digital transformation efforts, though challenges such as pricing restrictions and competitive pressures are noteworthy.
Analysis Date: February 25, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Public Storage is a company that provides space for people to store their belongings. They own and manage many self-storage facilities across the United States and parts of Europe, where customers can rent storage units to keep items like furniture, boxes, and seasonal decorations. Essentially, Public Storage helps people find a safe place for their things when they need extra space at home or during a move.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Consumer
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$456.15
Current Market Price: $284.89
IV/P Ratio: 1.60x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
38.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for PSA
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (24.01)
P/B ratio ≤ 1.5 (5.13)
Current ratio ≥ 2.0 (0.76x)
Long-term debt < Net current assets (-66.41x)
Margin of safety (38.0%)
PSA does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
21.30%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
73.08%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
44.21%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
The net profit margin of 44.21% indicates that PSA is adept at converting revenues into actual profit, reflecting strong operational efficiency.
The operating profit margin of 58.84% showcases robust control over operating expenses, enhancing overall profitability.
With a dividend payout ratio of 110.90%, PSA is distributing more earnings than it retains, which could limit future growth potential.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.95x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
0.76x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
An interest coverage ratio of 9.61 indicates that PSA has a healthy ability to cover interest expenses, reflecting strong financial stability.
A current ratio of 0.76 suggests that PSA may struggle to meet short-term liabilities, indicating potential liquidity concerns.
With a debt-to-equity ratio of 0.96 and a debt-to-assets ratio of 47.35%, PSA has considerable leverage, which may pose risks in downturns.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
PSA has demonstrated a positive trend in operational stabilization, with nearly all markets showing improvement and a sequential increase in same-store revenue growth for the first time in over two years. This points to a resilient business model and effective management strategies.
The completion of the 'Property of Tomorrow' program, a $600 million investment aimed at rebranding and enhancing the portfolio, is expected to increase annual retained cash flow from $400 million in 2024 to approximately $600 million in 2025, demonstrating a strong commitment to long-term value creation.
The company has a robust development pipeline valued at $740 million and plans to increase acquisition activity in 2025, supported by strong capital and liquidity positions. This diversified approach to growth is a significant competitive advantage.
With a reduction in competitive new supply, PSA is well-positioned for growth as fundamentals improve. The anticipated increase in acquisition activity and the stabilization of existing markets suggest a favorable outlook for the company's future performance.
PSA's focus on digital transformation and sustainability, including a solar program that has reduced utility use by 30%, positions the company to benefit from operational efficiencies and cost savings moving forward.
The ongoing pricing restrictions in Los Angeles due to the state of emergency may pose challenges, with an estimated 100 basis point impact on same-store revenues. This political and economic uncertainty may affect performance in the short term.
Despite improvements in operational metrics, the company anticipates average move-in rents to decline by 5%, indicating ongoing competitive pressures that could hinder revenue growth.
