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

Dividends

Extra Space Storage pays an annual dividend of $3.12 per share and has a dividend yield of 4.1%. Public Storage pays an annual dividend of $8.00 per share and has a dividend yield of 4.0%. Extra Space Storage pays out 107.2% 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. Extra Space Storage has increased its dividend for 6 consecutive years and Public Storage has increased its dividend for 7 consecutive years. Extra Space Storage is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Extra Space Storage has a beta of 0.34, indicating that its share price is 66% less volatile than the S&P 500. Comparatively, Public Storage has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Extra Space Storage and Public Storage, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Extra Space Storage 2 6 2 1 2.18
Public Storage 2 8 1 0 1.91

Extra Space Storage currently has a consensus target price of $86.00, indicating a potential upside of 12.70%. Public Storage has a consensus target price of $221.64, indicating a potential upside of 11.58%. Given Extra Space Storage’s stronger consensus rating and higher possible upside, equities analysts plainly believe Extra Space Storage is more favorable than Public Storage.

Profitability

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

Net Margins Return on Equity Return on Assets
Extra Space Storage 36.35% 15.20% 5.60%
Public Storage 53.35% 27.80% 13.85%

Institutional and Insider Ownership

78.9% of Public Storage shares are held by institutional investors. 3.7% of Extra Space Storage shares are held by insiders. Comparatively, 14.4% of Public Storage shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Extra Space Storage and Public Storage’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Extra Space Storage $1.07 billion 8.98 $705.23 million $2.91 26.22
Public Storage $2.70 billion 12.80 $1.93 billion $7.02 28.29

Public Storage has higher revenue and earnings than Extra Space Storage. Extra Space Storage is trading at a lower price-to-earnings ratio than Public Storage, indicating that it is currently the more affordable of the two stocks.

Summary

Public Storage beats Extra Space Storage on 12 of the 18 factors compared between the two stocks.

About Extra Space Storage

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.

About Public Storage

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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