Updated 3/11/2025

National Storage Affiliates Trust (NSA) is a real estate investment trust (REIT) specializing in self-storage facilities across the United States. The company operates a unique model, partnering with regional storage operators to expand its footprint. This strategy has helped NSA grow in a highly fragmented market, capitalizing on the increasing demand for storage solutions driven by life transitions, business needs, and urbanization.

Recently, NSA’s stock has taken a hit, closing at $37.80 with a drop of over 4%. The stock has been on a downward trend, and while the dividend remains attractive, there are some concerns about its sustainability. Investors who rely on consistent dividend income should take a closer look at NSA’s financial position, payout ratio, and future growth potential. Let’s dive in.

Key Dividend Metrics 📊

💰 Dividend Yield: 5.76% (Forward)
📈 5-Year Average Yield: 4.58%
💵 Annual Dividend Per Share: $2.28
🔄 Payout Ratio: 190.68% (Very High)
📆 Ex-Dividend Date: March 14, 2025
📊 Dividend Growth: Historically strong but under pressure

Dividend Overview

NSA offers a solid dividend yield of 5.76%, which is significantly higher than its five-year average of 4.58%. While that might sound appealing, the reason behind the elevated yield is a declining stock price rather than aggressive dividend growth.

One of the biggest red flags for dividend investors is the payout ratio, which currently stands at a staggering 190.68%. For REITs, payout ratios tend to be high because they distribute a large portion of their earnings as dividends. However, when the payout ratio exceeds 100%, it signals that the company is paying out more than it earns, which is not sustainable in the long run.

The next dividend payout is scheduled for March 31, 2025, with the ex-dividend date set for March 14. Unless NSA can generate higher cash flows, there’s a real risk that the company may have to adjust its dividend policy in the future.

Dividend Growth and Safety

NSA has historically been a reliable dividend grower, but with the current financial pressures, its ability to continue increasing payouts is questionable.

✔️ Dividend Growth – Over the years, NSA has maintained a pattern of dividend increases, making it attractive for income investors.
❌ Payout Ratio Concerns – A payout ratio exceeding 190% suggests NSA is stretching itself too thin.
⚠️ Debt Load – The company carries a high level of debt, with a debt-to-equity ratio of nearly 200%, which could impact its ability to sustain dividends.

Dividend safety is a growing concern here. If revenue continues to decline, or if debt servicing costs rise due to higher interest rates, NSA may be forced to slow down its dividend growth or even reduce payouts.

Chart Analysis

Price Trend and Moving Averages

The chart for National Storage Affiliates Trust (NSA) shows a clear downtrend over the past several months. After peaking near the $50 mark, the stock experienced a sharp decline, followed by continued weakness. The 50-day moving average, shown as the blue line, has been sloping downward since the late fall, staying below the 200-day moving average, which is represented by the purple line. This is a classic bearish signal known as a “death cross,” which indicates prolonged downward momentum.

More recently, the stock attempted a slight rebound, climbing off its lows in late January and early February. However, it remains below the 200-day moving average, suggesting that the overall trend has yet to shift bullish. The 50-day moving average is also acting as resistance, capping recent price attempts to move higher. Until NSA can break above these key levels, any upside movement may be limited.

Volume and Market Participation

Volume activity has picked up in recent weeks, especially on the stronger green bars, indicating increased buying interest. However, there are still heavy red volume bars from earlier selloffs, which show that sellers have been in control for most of this downtrend.

A closer look at the recent trading sessions shows some stronger volume spikes on up days, which is a positive sign. This could indicate that buyers are starting to step in at these levels. If volume continues to rise on green days while staying muted on red days, it could suggest a potential shift in sentiment.

Relative Strength Index (RSI)

The RSI, shown at the bottom of the chart, has been climbing from the oversold region. It spent a good portion of the recent downtrend below 30, which is considered oversold territory. Now, it’s moving closer to the middle of the range.

This indicates that selling pressure may be easing, but NSA is not yet in a strong bullish phase. If the RSI can push above 50 and hold, it could suggest a stronger upside move. If it starts rolling over again, it would indicate that the stock is struggling to gain momentum.

Recent Candle Action

The last five trading sessions have seen a mix of price action. There have been a couple of days with long lower wicks, showing that buyers stepped in after intraday weakness. However, upper wicks on other days suggest that sellers are still active, capping upside moves.

The latest candle closed near the lower end of the day’s range, indicating some selling pressure into the close. This suggests that while buyers are trying to push the stock higher, they haven’t gained full control just yet.

A close above the recent highs around $39.50 would be a more constructive sign, while a break below the recent support near $37 could invite further downside.

Analyst Ratings

📈 Recent Upgrades

🟢 KeyBanc Capital Markets upgraded National Storage Affiliates Trust (NSA) from “Sector Weight” to “Overweight,” setting a price target of $45. The firm cited improving fundamentals in the self-storage sector, expecting NSA to benefit from stabilizing occupancy rates and potential rent growth. Analysts also pointed to the company’s ability to maintain strong cash flow despite broader real estate market headwinds.

🟢 Deutsche Bank also adjusted its stance on NSA, moving from “Sell” to “Hold,” while raising the price target from $40 to $38. This shift was based on a more favorable outlook for NSA’s valuation, as well as improved sentiment toward the REIT sector following better-than-expected earnings and operational performance in the last quarter.

📉 Recent Downgrades

🔴 Evercore ISI downgraded NSA from “In-Line” to “Underperform,” lowering its price target to $35. The firm pointed to concerns over slowing revenue growth and a more challenging pricing environment in the self-storage industry. Analysts expressed caution about NSA’s high payout ratio, which could put pressure on future dividend sustainability.

🔴 Wells Fargo adjusted its price target from $32 to $36, maintaining an “Underweight” rating on the stock. The decision was based on macroeconomic risks, potential softness in demand for storage units, and higher competition in key markets. Wells Fargo analysts also noted that NSA’s elevated debt levels could limit financial flexibility in an uncertain economic climate.

🎯 Consensus Price Target

📊 Analysts currently have a “Hold” consensus rating on NSA, with an average 12-month price target of $42.56. This reflects a balanced view, recognizing NSA’s strengths in the self-storage market while factoring in broader industry headwinds and financial challenges.

Earning Report Summary

National Storage Affiliates Trust (NSA) just released its latest earnings report, and while there were some bright spots, the numbers also highlighted a few challenges the company is facing. Revenue for the quarter came in at around $754 million, which is down about 15 percent from last year. A big reason for the drop was weaker occupancy rates across its storage properties, along with some pricing pressure from competitors. Even with that decline, the company still managed to post $91 million in net income available to shareholders, which shows that business is still running profitably, just at a slightly slower pace.

One area that stood out in the report was the decline in Funds From Operations (FFO), which is a key measure for real estate investment trusts. FFO was lower than in previous quarters, which raises some concerns about how sustainable NSA’s current dividend payout really is. The payout ratio is already on the high side, and unless revenue picks up again, maintaining the current dividend could become a challenge. That said, the company reassured investors that its operating cash flow of $363 million is still strong enough to support ongoing distributions for now.

On the cost side, expenses have been creeping up. NSA is dealing with higher property taxes and maintenance costs, which, combined with lower revenue, have squeezed profit margins a bit. The operating margin for the quarter was 35.65 percent, which is a step down from previous periods. It seems like the company is struggling to raise rents fast enough to offset these rising costs, likely because of increasing competition in the self-storage market.

Debt was another big talking point. NSA’s total debt is sitting at around $3.47 billion, pushing its debt-to-equity ratio close to 200 percent. That’s not unusual for a REIT, but with interest rates still relatively high, it does raise some concerns. Management did acknowledge the debt levels but said they aren’t worried about liquidity, pointing to strong cash flow and available credit as a safety net.

Despite the challenges, the company isn’t slowing down. NSA is still looking to expand its portfolio in high-demand regions and is focused on improving efficiency across its operations. Leadership also hinted at possible partnerships and other cost-saving measures to help improve financial performance. While this quarter wasn’t perfect, NSA is still holding up, and investors will be watching closely to see if the company can get back on a stronger growth path.

Financial Health and Stability

A deeper look into NSA’s financials reveals a mix of positives and negatives.

• Revenue in the last twelve months was reported at $754 million, but quarterly revenue has dropped by 15% compared to the previous year.
• Profit margins remain positive at 14.78%, meaning the company is still generating earnings, but at a much lower rate.
• NSA reported $363 million in operating cash flow, showing that cash generation remains strong despite declining revenues.
• The debt load is significant, standing at $3.47 billion. With a debt-to-equity ratio of nearly 200%, NSA is highly leveraged, which could create challenges in refinancing or handling future interest rate hikes.

While the company remains profitable, declining revenues and high debt levels could pose a threat to its long-term financial health, especially if economic conditions worsen.

Valuation and Stock Performance

NSA’s stock has been under pressure, currently trading near its 52-week low of $34.58 and well below its 52-week high of $49.44.

• The stock’s trailing price-to-earnings (P/E) ratio is 33.55x, which is relatively high for a REIT, indicating a premium valuation.
• The forward P/E is even more concerning at 83.33x, suggesting that earnings expectations are weak moving forward.
• The price-to-book ratio is 4.11x, indicating that the stock is trading at a premium relative to its assets.

NSA’s 50-day moving average sits at $37.60, while the 200-day moving average is $41.71. The fact that the stock is trading below both suggests a bearish trend.

There’s also a decent amount of short interest, with nearly 6.88% of the float being shorted. This indicates that some investors are betting against NSA’s stock price recovering in the near future.

Risks and Considerations

1️⃣ Dividend Sustainability – The payout ratio is far above sustainable levels, making a future dividend cut a real possibility.
2️⃣ Revenue Decline – A 15% year-over-year drop in revenue raises concerns about future earnings potential.
3️⃣ High Debt Burden – With a debt-to-equity ratio nearing 200%, the company has little financial flexibility.
4️⃣ Rising Competition – The self-storage industry is becoming increasingly competitive, which could limit NSA’s ability to raise rents or expand profitably.
5️⃣ Stock Price Weakness – NSA is trading near its lows, and without strong financial improvements, it may struggle to recover.

Final Thoughts

NSA is a classic case of a high-yield REIT that looks attractive on the surface but carries significant risks beneath the hood. The company has a strong history of dividend growth, but with a payout ratio exceeding 190% and revenue declines, its ability to maintain its current dividend level is questionable.

For investors focused on income, NSA still offers a solid yield, but it comes with trade-offs. If the company can stabilize its revenue and improve cash flow, it may continue providing value. However, if current trends persist, investors may face a dividend cut or prolonged stock weakness.

The next few quarters will be crucial in determining whether NSA can navigate its financial pressures while keeping its dividend intact.