SmartStop Self Storage REIT, Inc. (NYSE: SMA)

Sector: Real Estate Industry: REIT - Industrial CIK: 0001585389
Market Cap 932.35 Mn
P/B 0.78
P/E -61.21
P/S 3.54
ROIC (Qtr) 2.36
Div Yield % 0.00
Rev 1y % (Qtr) 17.08
Total Debt (Qtr) 1.04 Bn
Debt/Equity (Qtr) 0.87
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About

Investment thesis

Bull case

  • Strong operating cash flow of 81.22M provides 2.17x coverage of SG&A expenses 37.48M, showing efficient operational cost management.
  • Strong free cash flow of (305.36M) provides 4.89x coverage of acquisition spending (62.45M), indicating disciplined M&A strategy.
  • Free cash flow of (305.36M) provides excellent 4.82x coverage of dividends (63.34M), indicating sustainable shareholder returns.
  • Operating cash flow of 81.22M provides strong 12.51x coverage of tax liabilities 6.49M, showing excellent fiscal position.
  • Cash reserves of 54.21M provide comfortable 8.35x coverage of tax obligations 6.49M, showing strong fiscal management.

Bear case

  • Operating cash flow of 81.22M barely covers its investment activities of (451.68M), with a coverage ratio of -0.18, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 81.22M provides thin coverage of dividend payments of (63.34M) with a -1.28 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 54.21M provide limited coverage of acquisition spending of (62.45M), which is -0.87x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of (305.36M) provides weak coverage of capital expenditures of 386.57M, with a -0.79 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 63.26M show weak coverage of depreciation charges of 67.76M, with a 0.93 ratio indicating high capital intensity and potential reinvestment needs.

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 0.77 1.14
EV to Cash from Ops. EV/CFO 22.65 24.26
EV to Debt EV to Debt 1.77 3.22
EV to EBIT EV/EBIT 29.07 50.75
EV to EBITDA EV/EBITDA 14.61 19.38
EV to Free Cash Flow [EV/FCF] EV/FCF -6.02 -0.63
EV to Market Cap EV to Market Cap 1.97 1.57
EV to Revenue EV/Rev 6.98 12.09
Price to Book Value [P/B] P/B 0.78 2.55
Price to Earnings [P/E] P/E -61.21 22.14
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -0.21 -0.46
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 34.94
Dividend per Basic Share Div per Share (Qtr) 0.00 3.19
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 25.32
Interest Coverage Int. cover (Qtr) 0.96 3.92
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -599.80 -38.11
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 20.37 19.56
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 41.56
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 96.39 27.07
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 1.08 9.45
EBIT Growth (1y) % EBIT 1y % (Qtr) -3.17 22.14
EBT Growth (1y) % EBT 1y % (Qtr) 30.85 19.88
EPS Growth (1y) % EPS 1y % (Qtr) 16.42 14.36
FCF Growth (1y) % FCF 1y % (Qtr) -11,583.87 -604.79
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.51 3.65
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.11 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.14 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) 0.87 1.46
Interest Cover Ratio Int Coverage (Qtr) 0.96 3.92
Times Interest Earned Times Interest Earned (Qtr) 0.96 3.92
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 49.80 67.77
EBIT Margin % EBIT Margin % (Qtr) 24.02 40.11
EBT Margin % EBT Margin % (Qtr) -1.02 24.24
Gross Margin % Gross Margin % (Qtr) 62.50 76.41
Net Profit Margin % Net Margin % (Qtr) -5.80 22.54