Real estate investment trust Extra Space Storage , which operates almost 900 self-storage facilities, recently reported solid first quarter results as same-store revenue increased on the heels of a rise in storage occupancy rates.

Management provided encouraging guidance for 2012, prompting analysts to revise their estimates higher for both 2012 and 2013. This sent shares to a Zacks #2 Rank (Buy.)

 As for first quarter results, funds from operation (FFO) per share was 33 cents, in-line with the Zacks Consensus Estimate. It was a 32% increase over the same quarter last year.

Same-store revenue rose 6.3% year-over-year, driven by a 340 basis point increase in same-store occupancy to 87.1%. Meanwhile, same-store net operating income increased 11% over the same period.

Management provided full year FFO guidance of $1.40-$1.46 per share based on same-store revenue growth of 3.5-5.0%. This prompted analysts to revise their estimates higher for both 2012 and 2013.

The Zacks estimate for 2012 is now $1.46, at the upper end of guidance, which represents an 18% growth over 2011 FFO. The 2013 consensus is currently $1.64, corresponding with 13% growth.

Aside from the earnings growth, investors are rewarded with a dividend that yields a solid 2.8%.

The company actually cut its quarterly dividend in late 2009 and then again in early 2010. But management raised it by 40% in 2011 and by 43% earlier this year.

Valuation ratios don’t disappoint, either. Shares currently trade at 2.5x book value, a premium to the industry average of 2.0x. It is trading at 18.6x forward earnings, also above the industry average of 14x. The crux of Extra Space Storage’s business largely depends on how many people flock to the company’s storage facilities. Traffic has increased lately, creating a unique investment opportunity for investors, most notably the the double-digit earnings growth. (via Forbes.com)]]>