CubeSmart (NYSE: CUBE)

Sector: Real Estate Industry: REIT - Industrial CIK: 0001298675
Market Cap 6.90 Bn
P/B 4.17
P/E 86.33
P/S 13.53
ROIC (Qtr) 7.38
Div Yield % 3.68
Rev 1y % (Qtr) 5.24
Total Debt (Qtr) 3.49 Bn
Debt/Equity (Qtr) 1.26
Add ratio to table...

About

CubeSmart, a self-administered and self-managed real estate investment trust (REIT) represented by the ticker symbol CUBE, operates primarily within the self-storage industry in the United States. As of December 31, 2023, the company owned or partially owned and consolidated 611 self-storage properties across 24 states and the District of Columbia, encompassing an approximate total of 44.1 million rentable square feet. CubeSmart's main business activities revolve around the ownership, operation, management, acquisition, and development of self-storage...

Read more

Investment thesis

Bull case

  • Operating cash flow of 636.69M provides strong 55.37x coverage of stock compensation 11.50M, indicating sustainable incentive practices.
  • Strong operating cash flow of 636.69M provides 10.17x coverage of SG&A expenses 62.62M, showing efficient operational cost management.
  • Robust free cash flow of 534.10M exceeds capital expenditure of 102.59M by 5.21x, indicating strong organic growth funding capability.
  • Tangible assets of 6.76B provide exceptional 158.17x coverage of deferred revenue 42.72M, showing strong service capability backing.
  • Operating cash flow of 636.69M provides strong 14.90x coverage of deferred revenue 42.72M, indicating service delivery capability.

Bear case

  • Operating cash flow of 636.69M barely covers its investment activities of (614.05M), with a coverage ratio of -1.04, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 636.69M provides thin coverage of dividend payments of (473.07M) with a -1.35 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 114.76M provide limited coverage of acquisition spending of (506.46M), which is -0.23x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 463.93M show weak coverage of depreciation charges of 249.81M, with a 1.86 ratio indicating high capital intensity and potential reinvestment needs.
  • Cash position of 114.76M provides weak coverage of payables of 365.84M, which is 0.31x, indicating potential working capital stress and supplier relationship risks.

Peer comparison

Companies in the REIT - Industrial
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PLD Prologis, Inc. 131.57 Bn 39.60 14.97 35.04 Bn
2 PSA Public Storage 52.97 Bn 33.41 10.98 10.25 Bn
3 EXR Extra Space Storage Inc. 15.99 Bn 113.72 34.08 13.66 Bn
4 LINE Lineage, Inc. 10.60 Bn -59.87 1.98 7.77 Bn
5 EGP Eastgroup Properties Inc 10.17 Bn 39.51 14.10 1.63 Bn
6 REXR Rexford Industrial Realty, Inc. 8.74 Bn 43.69 8.72 3.25 Bn
7 FR First Industrial Realty Trust Inc 7.95 Bn 32.11 10.93 2.57 Bn
8 STAG STAG Industrial, Inc. 7.19 Bn 26.29 8.50 3.29 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.24 1.14
EV to Cash from Ops. EV/CFO 31.74 24.26
EV to Debt EV to Debt 2.39 3.22
EV to EBIT EV/EBIT 60.43 50.75
EV to EBITDA EV/EBITDA 27.19 19.38
EV to Free Cash Flow [EV/FCF] EV/FCF -28.63 -0.63
EV to Market Cap EV to Market Cap 1.21 1.57
EV to Revenue EV/Rev 16.39 12.09
Price to Book Value [P/B] P/B 4.17 2.55
Price to Earnings [P/E] P/E 86.33 22.14
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.75 -0.46
Dividend Payout Ratio % Div Payout % (Qtr) 132.70 34.94
Dividend per Basic Share Div per Share (Qtr) 2.08 3.19
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 89.12 25.32
Interest Coverage Int. cover (Qtr) 4.34 3.92
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 15.49 -38.11
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 153.02 19.56
Dividend Growth (1y) % Div 1y % (Qtr) 1.96 41.56
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -5.90 27.07
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 2.27 9.45
EBIT Growth (1y) % EBIT 1y % (Qtr) -5.90 22.14
EBT Growth (1y) % EBT 1y % (Qtr) -11.19 19.88
EPS Growth (1y) % EPS 1y % (Qtr) -12.85 14.36
FCF Growth (1y) % FCF 1y % (Qtr) 9.60 -604.79
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2.56 3.65
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.16 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.64 0.34
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.06
Debt to Equity Ratio Debt/Equity (Qtr) 1.26 1.46
Interest Cover Ratio Int Coverage (Qtr) 4.34 3.92
Times Interest Earned Times Interest Earned (Qtr) 4.34 3.92
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 64.40 67.77
EBIT Margin % EBIT Margin % (Qtr) 41.87 40.11
EBT Margin % EBT Margin % (Qtr) 32.21 24.24
Gross Margin % Gross Margin % (Qtr) 69.40 76.41
Net Profit Margin % Net Margin % (Qtr) 32.20 22.54