The Company also plans to reduce its regular quarterly dividend by approximately 30% (from $0.64 to $0.45 per share) commencing with 2009’s second quarter payment. David Rogers, the Company’s Chief Financial Officer, stated: “Given the current economic outlook and its impact on our business, the reduced distributions will preserve liquidity and provide additional flexibility. Despite the fact that we have a solid balance sheet, we continue to place a high priority on capital preservation and believe such prudence is in the Company’s long term best interest.”
My take is that there is concern about the future cash flows.
At this time, self-storage is treading water, but as REITs, they are doing better than the other real estate REITs.
I think occupancy is not growing, but it is not going backward too much either.
I like SSS's balance sheet. I also think that self storage is not a discretionary choice for most people. I also see some upside as cottage businesses start to bloom which always seems to happen in bad times.
But SSS has a lot of head room if it chooses to cut its dividend in the event that revenues start taking a hit in the near term.