PSA Stock Report

2-Year Price History

A Word Of Caution

Public Storage (PSA) has experienced a very significant drop in earnings and/or earnings estimates. In and of itself this drop in earnings could be an indication of greater troubles within the company.

Please take a moment to look at the RazorWire feed on the right hand side of the report to find more information regarding the company's dropoff in performance. Each time Public Storage is mentioned on business television recently should be displayed. This helps bring you up to date on any major issues they are facing right now.

Therefore, (and as always), check additional sources and available information regarding PSA before making an investment decision.

Ockham's Rating

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PSA Revenue

As we have often noted, in our valuation methodology, "Cash is King." Well, it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, PSA the high and low end of the Price to Sales per share ratios are 8.33x and 5.27x respectively.

Notice that PSA's current Price to Sales per share ratio is 6.16x, which is below its historical average only slightly. So, while not a huge positive for our analysis, we do feel it is worth noting that PSA does look a bit undervalued on a Price to Sales basis, all other factors being equal. However, if the Price to Sales ratio drops further, Ockham Research is likely to become more bullish on this stock.

PSA Cash Earnings

Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. PSA is significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for PSA, the current level of Cash Earnings compared to its historical levels helps identify where PSA is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 49.52 and a historical low Cash Earnings per share ratio of 30.97, an investor can relate where value becomes optimal.

So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for PSA? From the Ockham perspective, we are looking specifically at PSA to see if the market is recognizing the huge disparity between PSA's past stock price to Cash Earnings ratio to today's levels. At a difference of 42% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at PSA. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.

PSA Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for PSA to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.

The estimated annual dividend for PSA is $2.20 producing a current dividend yield of 3.46%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from PSA against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from PSA over previous years was 7.00% while the lowest dividend yield was 1.71%. It is never a good sign for a company to pay significantly lower dividends, in this case 20.55% below the median yield. Although, dividends are a relatively small portion of our analysis framework, we still see this as a negative factor.