Daily Stock Pick: April 29th, 2022

Stocks ticked lower this morning to start the final trading session of April following quarterly results from Apple (AAPL) and Amazon (AMZN).  Despite yesterday’s gains, stocks are on track for a losing month.  The Dow is down 2.2% for the month.  The S&P 500 is off by 5.4%, and the Nasdaq is on pace for its worst month since March 2020, down a whopping 9.5%.  Rising inflation has been a primary driver of market volatility.   

As investors look for ways to improve their risk-return profiles, many seek stability and companies with a reputation for rewarding investors with regular payouts.  Today we’ll discuss a particularly attractive ticker from an asset class known for offering strength and stability during highly volatile periods.  This company also rewards investors with an impressive share of profits, making it a wise choice for anyone looking to shore up their long-term returns.  

Real Estate Investment Trusts (REITs), one of last year’s top-performing sectors, are popular among investors due to the booming real estate market, dividend advantages, and portfolio diversification. Commercial real estate is the third-largest asset class in the U.S., and REITs may provide a diverse mix of real estate assets and long-term total returns comparable to other stocks.

When rates rise, investors often forsake high-dividend-paying equities in favor of bonds, which offer a similar return but pose less risk and volatility. According to recent statistics, REITs have one of the lowest average risks, illustrating the performance of various asset classes following rate rises across three periods.  REITs did well throughout both high and low inflation eras. This implies they’re less vulnerable to prediction risk or the chance that investors accurately forecast periods of high inflation.

Life Storage, Inc. (LSI) is a self-storage REIT that invests in, owns, and manages self-storage facilities. It provides services for business, automobile, and wine storage. With over 1,000 sites in the United States and Canada, LSI owes to e-commerce driving warehouse demand and the requirement for product storage and the tech industry’s servers. Occupancy and rental rates have remained high due to supply chain concerns, which gives LSI an advantage over other REITs.

LSI has the kind of robust financials we all look for in a stock. They have an impressive earnings report history, most recently beating quarterly EPS projections by 6.83% and revenue expectations by 4.78%. LSI shows very healthy year-over-year numbers, with notable revenue growth of 33.03% and EPS growth of 56.14%. Until reporting again, LSI offers $230 million in sales at 90 cents per share. LSI currently has a dividend yield of 2.75%, with a nice quarterly cash payout of $1.00 per share.

LSI has a consensus price target of 154.00 among analysts that provide 12-month price estimates, with a high of 204.00 and a low of 138.00. The median estimate implies an increase of 5.79% over current pricing, and the consensus gives LSI a sturdy buy rating.

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Before you consider buying LSI, you'll want to see this.

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And it's not LSI.

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