With a hefty dividend and a track record of strong and stable growth, Extra Space Storage is packing up for a potential move into a buy zone.
While this S&P 500 component didn't join industry peer American Tower on this month's list of new buys by the best mutual funds, it is showing signs of institutional demand.
The buying interest makes perfect sense because the company has posted seven straight quarters of rising fund ownership while sporting a B+ Accumulation/Distribution Rating and a 1.3 up/down volume ratio. Plus, 58 funds with an A+ rating from IBD have reported positions in EXR stock.
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Extra Space Storage Ranks No. 1 Among Peers
Headquartered in Salt Lake City, Extra Space Storage is a real estate investment trust, or REIT. As of March 31, it owned and/or operated 2,130 self-storage properties, comprising some 1.5 million units and roughly 164.2 million square feet of rentable storage space.
The company offers a broad range of storage units across the country, including boat, recreational vehicle and business storage. Next to industry leader Public Storage, Extra Space Storage is the U.S.' second-largest owner/operator of self-storage properties.
With a 96 Composite Rating, EXR stock ranks No. 1 among property REITs. AMT stock is just behind, with a 95 rating.
Extra Space Storage joins the IBD Breakout Stocks Index, updated weekly. Fellow REIT stocks Life Storage, CubeSmart and Vici Properties also made this elite list.
The REIT corporate structure reports "funds from operations," or the FFO-per-share ratio, rather than earnings per share.
Extra Space Storage has reported FFO growth ranging from 21% to 41% over the last six quarters. Sales have grown 16% to 25% in the last five reports while the company has posted seven straight quarters of rising revenue growth.
Extra Space Storage Among Top Dividend Stocks
Extra Space Storage is among the top dividend stocks to watch, with a payout yielding 2.8% on an annualized basis.
Other top-ranked REITs paying a dividend of 2% or more include BRT Apartments (4.1%), Life Storage (3.2%) and American Tower (2%). Fellow IBD Breakout Index members Vici Properties (4.1%) and CubeSmart (3.4%) also fit that bill.
EXR Stock Nears Double-Bottom Breakout
With its relative strength line already at a new high, Extra Space Storage has formed a double bottom with a 222.45 buy point.
In a sign of rebounding technical strength, the 21-day moving average has just edged past the 200-day line. The 50-day line has begun to trend higher, although it remains below the 200-day line.
Life Storage is showing similar action, in solidarity with leading REITs, while AMT and VICI have entered new buy zones.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF, managed by Innovator Capital Management, tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to invest in the entire index as opposed to buying individual stocks.
Learn more here about the ETF and Innovator funds.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
