REIT Pick #2: Public Storage (PSA)
Public Storage (PSA) takes advantage of everything that can go wrong in life … but before you think this sounds predatory, take a step back.
When do people need to put things in storage? When they downsize, which is what is happening in an economy where people are leaving the workforce in record numbers.
Know anyone who has gotten divorced? What do they do? Put stuff in storage.
Has a loved one died? More storage needed.
Moving or relocating? Once again, storage needed!
None of these things are going to change, because they’re just a part of daily life, making PSA stock a perfect long-term holding for retirement. All Public Storage needs to do is draw down capital, build its facilities, then rent those spaces out. Some are short term, and others are long term.
What this most reminds me of is another very profitable business — timeshares. Borrow money, build a hotel, sell each unit 52 times. It’s the same concept with storage.
PSA stock just increased its quarterly dividend by 12% to $1.40 in November, bringing its yield up to 3.6%.