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3 Self-Storage REITs to Consider Adding to Your Portfolio in 2019

- By Jacob Maslow

Self-storage REITs remained strong through the December sell-off, despite the REIT sector falling rapidly. The iShares US Real Estate ETF (IYR) suffered severe losses in December, with the price falling from $82.16 a share to $74.94 to end the year, over an 8.7% loss on the month. The exchange-traded fund is a good indicator of the strength of REITs, with a target across domestic REITs and real estate stocks.

Despite the ETF falling, we saw quite a few self-storage stocks suffer less significant losses during the sell-off compared to the overall market. These REITs offer an opportunity to diversify some of the real estate holdings in your portfolio.

1. Life Storage Inc.

Life Storage (LSI) stock rose over 5% in 2018, despite major selloffs and a turbulent year for many stocks. Economic uncertainty and volatility did little to impact the company's stock until the December market dip.

Life Storage has a portfolio of over 750 self-storage units across the U.S., and the stock is up over 2% between Jan. 2 and Jan. 8.

Life Storage remains a strong REIT, with five-year gains of over 40%. Life Storage also offers the opportunity to own an income-producing stock, with the most recent quarterly dividend being $1 per common share and $4 per share on an annualized basis.

2. Public Storage

Public Storage (PSA) has a market cap of $34 billion, making it the top self-storage REIT by market capitalization. In comparison, Life Storage has a market cap of $4.2 billion. The company has years of great yields, and at the end of 2017, the REIT held over 2,400 self-storage facilities in the U.S.

The company focuses on ground-up development and acquisitions, and 16 facilities were purchased in the first three months of 2018.

Continual expansion and some 222 storage facilities in Europe position Public Storage as a good long-term investment. The stock remained down 2% in 2018, but has risen over 30% in the past five years and has a dividend yield of 4.07%.

3. Extra Space Storage Inc.

Extra Space Storage (EXR) has a long history, dating back to 1977, and the company has started to focus on acquisitions. It owns more than 1,606 facilities in 38 states, and its stock rose over 5% last year.

The company offered a fourth-quarter 2018 dividend of 86 cents per common share.

With over 1.1 million units, the company is well positioned to continue growing in 2019. The company also offers business, RV and boat storage options.

Disclosure: The author has no stake in the listed equities.

This article first appeared on GuruFocus.