Our analysis is based on comparing CubeSmart with the following peers – Public Storage, Extra Space Storage Inc. and Life Storage, Inc. (PSA-US, EXR-US and LSI-US).
CubeSmart’s dividend yield is 4.77 percent and its dividend payout is 163.64 percent. This compares to a peer median dividend yield of 4.13 percent and a payout level of 141.44 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s relatively low dividend quality score of 17 out of a possible score of 100 raises questions on the sustainability of its robust payout ratio.
Dividend Quality Overview
- Over the last twelve months (prior to September 30, 2017), CUBE-US paid a low quality dividend, which represents a yield of 3.73% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 1 was medium quality and 4 were low quality.
- The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future.
Quadrant label definitions. Hover to know more
Over the last twelve months (prior to September 30, 2017), CUBE-US paid a low quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 1.60x), investing cash flow (coverage of -0.92x), issuance cash flow (coverage of -0.12x) and twelve-month prior cash (coverage of 0.52x), for a total dividend coverage of 1.06x.
CUBE-US’s issuance cash flow includes outflows from net share buybacks (coverage of -0.43x). Thus, the total coverage including share buybacks is 1.48x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.
|Dividend Yield (%)||2.07||2.66||2.1||2||3.1||4.77|
|Dividend Payout (%)||-311.39||791.74||392.86||163.78||202.16||163.64|
A complete list of metrics and analysis is available on the company page.
CubeSmart operates as a self-managed and self-administered real estate investment trust with its operations conducted solely through CubeSmart LP and its subsidiaries. It owns, operates, develops, manages, and acquires self-storage properties. The company was founded in July 2004 and is headquartered in Malvern, PA.
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