Critical Survey: Crown Castle (NYSE:CCI) and Extra Space Storage (NYSE:EXR)

Extra Space Storage (NYSE:EXR) and Crown Castle (NYSE:CCI) are both large-cap real estate companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares Extra Space Storage and Crown Castle’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Extra Space Storage	27.80%	6.70%	3.27%
Crown Castle	20.71%	-51.60%	3.70%

Institutional and Insider Ownership

99.1% of Extra Space Storage shares are owned by institutional investors. Comparatively, 90.8% of Crown Castle shares are owned by institutional investors. 1.0% of Extra Space Storage shares are owned by insiders. Comparatively, 0.1% of Crown Castle shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Extra Space Storage and Crown Castle”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Extra Space Storage	$3.45 billion	9.10	$974.00 million	$4.53	32.78
Crown Castle	$4.16 billion	8.02	$444.00 million	$1.97	38.80

Extra Space Storage has higher earnings, but lower revenue than Crown Castle. Extra Space Storage is trading at a lower price-to-earnings ratio than Crown Castle, indicating that it is currently the more affordable of the two stocks.

Dividends

Extra Space Storage pays an annual dividend of $6.48 per share and has a dividend yield of 4.4%. Crown Castle pays an annual dividend of $4.25 per share and has a dividend yield of 5.6%. Extra Space Storage pays out 143.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Crown Castle pays out 215.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Extra Space Storage has increased its dividend for 1 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings for Extra Space Storage and Crown Castle, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Extra Space Storage	0	10	6	0	2.38
Crown Castle	0	12	7	2	2.52

Extra Space Storage presently has a consensus target price of $147.73, suggesting a potential downside of 0.51%. Crown Castle has a consensus target price of $95.13, suggesting a potential upside of 24.46%. Given Crown Castle’s stronger consensus rating and higher possible upside, analysts plainly believe Crown Castle is more favorable than Extra Space Storage.

Risk and Volatility

Extra Space Storage has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Crown Castle has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Summary

Extra Space Storage beats Crown Castle on 10 of the 18 factors compared between the two stocks.

About Extra Space Storage

Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a self-administered and self-managed REIT and a member of the S&P 500. As of December 31, 2023, the Company owned and/or operated 3,714 self-storage stores in 42 states and Washington, D.C. The Company's stores comprise approximately 2.6 million units and approximately 283.0 million square feet of rentable space operating under the Extra Space, Life Storage and Storage Express brands. The Company offers customers a wide selection of conveniently located and secure storage units across the country, including boat storage, RV storage and business storage. It is the largest operator of self-storage properties in the United States.

About Crown Castle

Crown Castle owns, operates and leases more than 40,000 cell towers and approximately 90,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market. This nationwide portfolio of communications infrastructure connects cities and communities to essential data, technology and wireless service – bringing information, ideas and innovations to the people and businesses that need them.