Public Storage

Methodology

This EPS-based method has fundamental limitations for Public Storage as a REIT, since depreciation distorts reported earnings despite stable cash flows from self-storage facilities. Investors should use FFO or AFFO-based models instead. The predictable nature of storage rental income with month-to-month leases makes cash flow-based valuation straightforward.

Methodology

Traditional PEG analysis is problematic for Public Storage given GAAP depreciation distortions. If using PEG, substitute FFO or AFFO growth for EPS growth to get meaningful comparisons against self-storage REIT peers. Growth expectations should reflect occupancy trends, rate growth potential, and development pipeline in target markets.

Methodology

Public Storage offers a substantial dividend typical of equity REITs, which must distribute most taxable income. The dividend represents FFO generation from the self-storage portfolio. For REITs, combine dividend yield with FFO growth expectations rather than using traditional PEGY calculations based on distorted GAAP earnings.