Critical Review: Life Storage (LSI) & Its Rivals

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Life Storage (NYSE: LSI) is one of 236 public companies in the “Real estate investment trusts” industry, but how does it contrast to its peers? We will compare Life Storage to similar companies based on the strength of its earnings, risk, dividends, valuation, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Life Storage and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Life Storage 5 9 0 0 1.64
Life Storage Competitors 1722 8262 8824 244 2.40

Life Storage presently has a consensus target price of $82.08, suggesting a potential downside of 14.73%. As a group, “Real estate investment trusts” companies have a potential upside of 5.83%. Given Life Storage’s peers stronger consensus rating and higher possible upside, analysts plainly believe Life Storage has less favorable growth aspects than its peers.

Insider and Institutional Ownership

95.2% of Life Storage shares are owned by institutional investors. Comparatively, 72.8% of shares of all “Real estate investment trusts” companies are owned by institutional investors. 1.8% of Life Storage shares are owned by insiders. Comparatively, 6.9% of shares of all “Real estate investment trusts” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Life Storage and its peers revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Life Storage $529.75 million $96.36 million 18.13
Life Storage Competitors $790.71 million $173.57 million 15.07

Life Storage’s peers have higher revenue and earnings than Life Storage. Life Storage is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Risk and Volatility

Life Storage has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500. Comparatively, Life Storage’s peers have a beta of 0.58, indicating that their average share price is 42% less volatile than the S&P 500.

Dividends

Life Storage pays an annual dividend of $4.00 per share and has a dividend yield of 4.2%. Life Storage pays out 75.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Real estate investment trusts” companies pay a dividend yield of 4.5% and pay out 71.9% of their earnings in the form of a dividend. Life Storage lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares Life Storage and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Life Storage 20.55% 5.52% 2.90%
Life Storage Competitors 23.40% 6.57% 2.61%

Summary

Life Storage peers beat Life Storage on 12 of the 15 factors compared.

Life Storage Company Profile

Life Storage, Inc. is a self-administered and self-managed equity REIT that is in the business of acquiring and managing self storage facilities. Located in Buffalo, New York, the Company operates more than 700 storage facilities in 28 states. The Company serves both residential and commercial storage customers with storage units rented by month. Life Storage consistently provides responsive service to its 375,000-plus customers, making it a leader in the industry. For more information visit http://invest.lifestorage.com/.

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