Company Overview - National Storage Affiliates Trust (NSA) is a real estate investment trust based in Greenwood Village, Colorado, focusing on self-storage properties primarily in the top 100 metropolitan areas in the U.S. [2] Investment Thesis - NSA presents a compelling bullish opportunity in the U.S. self-storage sector, currently operating at a rare combination of trough operating metrics and valuation multiples [3] - The self-storage industry's supply-demand dynamics are becoming favorable, with housing turnover at historic lows, which is expected to recover as interest rates decline, significantly impacting self-storage demand [4] Market Position - NSA is the most depressed name among self-storage REITs, with about two-thirds of its portfolio in Sunbelt markets that faced overbuilding and unsustainable demand post-COVID, leading to lower occupancy levels compared to peers [5] - Management has indicated a positive rate of change heading into Q4, with move-in rates increasing by approximately 3.5% in Q3 compared to 1.3% in Q2, and occupancy declines stabilizing, indicating potential for recovery [6] Valuation Metrics - Self-storage cap rates are at their widest since 2010, with NSA trading at a 75 basis point cap rate premium to the sector, contrasting with parity pre-COVID [7] - The stock offers a dividend yield of approximately 7.6%, which is nearly covered even at trough earnings [7] Growth Potential - A normalization in sector multiples could drive around 30% upside for NSA, with potential for closer to 40% due to its relative discount, alongside improving fundamentals [9] - NSA is projected to offer an attractive ~25% three-year internal rate of return (IRR), supported by multiple rerating, earnings recovery, and improving housing-driven demand [9]

Core Insights - National Storage Affiliates Trust (NSA) is recognized as one of the 13 best dividend stocks with a yield exceeding 6% [1] - UBS has reduced its price target for NSA from $30 to $29, maintaining a Neutral rating, reflecting a broader outlook on REITs as they approach a significant reset in 2026 [2] Company Developments - NSA has entered a new joint venture with Investment Real Estate Management (IRE), a former regional operator, focusing on self-storage properties under the "Moove In" brand [3] - The joint venture is projected to have approximately $350 million in buying power, with NSA contributing 75% of the equity capital, up to $105 million, in exchange for preferred equity with a 10% annual return [4] - The capital from the joint venture is expected to be deployed over the next 24 months, targeting value-add self-storage opportunities in favorable demographic markets [5] Industry Outlook - UBS anticipates that 2026 will be a pivotal year for the REIT sector, forecasting total returns of 9%–11% driven by improving macroeconomic conditions and easing supply pressures [2] - The firm expects a two-phase market environment in 2026, with a defensive approach in the first half and stronger catalysts in the latter half [2]

Group 1 - The article focuses on National Storage Affiliates Trust (NSA) and aims to provide a credit rating using Moody's methodology [2] - The investment group Trade With Beta, led by Denislav Iliev, specializes in identifying mispriced investments in fixed-income and closed-end funds [3] - Trade With Beta offers features such as frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, and hedging strategies [3] Group 2 - The importance of timing in trading closed-end funds and the potential for directional and arbitrage opportunities due to market price deviations is emphasized [1]

Core Insights - Old Dominion University has achieved a significant milestone by becoming the first institution to receive dual validation from the NSA for its innovative cyber and artificial intelligence programs, setting a new national benchmark in cybersecurity education [1][6] - The university's cybersecurity programs are validated through 2030, demonstrating a long-term commitment to excellence in the field [2][6] - Old Dominion University is the only institution in Virginia and one of ten nationwide to earn all three of NSA's Centers of Academic Excellence designations, highlighting its leadership in preparing students for the intersection of artificial intelligence and cyber defense [3][6] Program Details - The Bachelor of Science in Cybersecurity with a Major in Artificial Intelligence for Cybersecurity received AICyber validation, while the Master of Science in Cybersecurity with a concentration in AI Security was validated for the SecureAI program [2] - The School of Cybersecurity has grown significantly since its inception in 2015, enrolling approximately 1,700 students this fall and graduating over 1,500 alumni [4] Partnerships and Opportunities - Old Dominion University has developed partnerships with national agencies and companies, including local military bases, the NSA, and Amazon, to provide students with internship, research, and certification opportunities [5] - This commitment to innovation ensures that graduates are well-equipped to lead in the cybersecurity industry [5]

Core Insights - Old Dominion University's School of Cybersecurity has achieved dual validation from the National Security Agency (NSA) for its cyber and artificial intelligence programs, marking a significant milestone in cybersecurity education [1][2]. Group 1: Program Validation - The Bachelor of Science in Cybersecurity with a Major in Artificial Intelligence for Cybersecurity received validation for NSA's AI for Cybersecurity recognition, AICyber [4]. - The Master of Science in Cybersecurity with a concentration in AI Security received validation for the Security of AI program, SecureAI [4]. - These programs are validated through 2030, highlighting their long-term relevance [4]. Group 2: Institutional Commitment - Old Dominion University emphasizes innovation and quality in its educational offerings, as stated by President Brian O. Hemphill, Ph.D., showcasing the institution's commitment to meeting industry needs [3][5]. - The School of Cybersecurity has earned all three of NSA's Centers of Academic Excellence (CAE) designations, including CAE Cyber Defense, CAE Cyber Operations, and Cyber Research, establishing its leadership in cybersecurity education [6]. Group 3: Growth and Development - The School of Cybersecurity has grown significantly since its inception, enrolling approximately 1,700 students and graduating over 1,500 alumni since its establishment in 2020 [7]. - The academic programs have expanded from a single interdisciplinary major to nearly a dozen undergraduate and graduate programs, adapting to the evolving national cybersecurity workforce [8]. Group 4: Partnerships and Opportunities - The University has developed partnerships with national agencies and companies, including local military bases, NSA, and Amazon, to create internship, research, and certification opportunities for students [8]. - The launch of MonarchSphere powered by Google Cloud represents a collaboration aimed at fostering innovation in higher education [10].

Core Viewpoint - National Storage Affiliates Trust (NSA) is currently trading at levels similar to those during the pandemic, presenting a strong investment opportunity due to their PRO-Transition strategies and the potential for macroeconomic improvements, particularly with anticipated rate cuts [1]. Company Analysis - NSA has implemented PRO-Transition moves that are expected to enhance its market position and operational efficiency [1]. - The company is positioned to benefit from macroeconomic factors, especially with the possibility of interest rate reductions, which could positively impact its financial performance [1]. Industry Context - The investment landscape is influenced by broader economic conditions, including interest rates, which can affect the performance of real estate investment trusts (REITs) like NSA [1].

Core Viewpoint - The article discusses a selection of stocks with high dividend yields that are currently viewed unfavorably by Wall Street analysts, suggesting potential investment opportunities in these "hated" stocks. Group 1: Real Estate Investment Trusts (REITs) - National Storage Affiliates Trust (NSA) has a yield of 7.9% and operates 1,069 properties across 37 states and Puerto Rico, benefiting from a recession-resistant business model, although it is currently facing a 20% pullback in performance [3][4] - NSA's recent quarter showed declines in earnings, core FFO, same store net operating income, and occupancy, reflecting broader challenges in the self-storage sector rather than unique issues for NSA [3][4] - Alexander's (ALX) has an 8.5% yield and is highly concentrated, with 60% of its revenues coming from tenant Bloomberg. The company is in discussions for loan restructuring after failing to repay a $300 million loan [5][6] - Despite challenges, ALX has shown double-digit total returns in 2025, outperforming the broader real estate sector, but Wall Street remains skeptical due to dividend concerns [7] Group 2: Talent Solutions and Consulting - Robert Half (RHI) has a yield of 9.0% and operates in contract talent solutions, permanent placement, and consulting services. The company has seen its stock price drop 80% since its peak in 2022, leading to more Sell and Hold ratings than Buys [10][11] - The decline in RHI's stock is attributed to a post-COVID hiring moderation, with significant job losses reported, although the company believes the impact of AI on its business is overstated [12][13] - RHI's earnings are expected to drop by 45% this year, raising concerns about dividend coverage as the payout is projected to exceed earnings through at least the end of 2026 [14] Group 3: Crafting and Creativity Platform - Cricut (CRCT) boasts a high yield of 20.6% and operates as a creativity platform, offering machines and software for crafting. The company initiated a new semiannual dividend program despite declining profits [16][17] - The stock has seen a significant decline, leading to a yield increase above 20%, with analysts recommending selling the stock [19] - Despite a loyal user base and expected profit growth of over 20% in 2025, Cricut faces challenges with flat or declining revenues projected in the coming years, particularly if economic conditions affect holiday shopping [20][21]

Core Viewpoint - The article discusses four high dividend yield stocks, ranging from 7.9% to 20.6%, that are currently being overlooked by Wall Street analysts despite their potential for income generation [1][2]. Group 1: National Storage Affiliates Trust (NSA) - NSA is a self-storage REIT with a yield of 7.9%, operating 1,069 properties across 37 states and Puerto Rico, and is considered recession-resistant [3][4]. - The stock has experienced a 20% decline in 2025, attributed to lower earnings and occupancy rates, although similar trends are seen in competitors, indicating broader industry challenges [4][5]. - NSA's payout coverage is tightening, with expected earnings of $2.20 per share against a dividend payout of $2.28, leading to concerns about sustainability [5]. Group 2: Alexanders (ALX) - ALX, yielding 8.5%, is a concentrated landlord with significant reliance on a single tenant, Bloomberg, which accounts for 60% of its revenue [6][7]. - The company is facing financial difficulties, including a loan restructuring discussion after failing to repay a $300 million loan [7]. - Despite these issues, ALX has delivered double-digit total returns in 2025, outperforming the broader real estate sector [8]. Group 3: Robert Half (RHI) - RHI has a yield of 9.0% and operates in talent solutions and consulting, but its stock has plummeted 80% since its peak in 2022, leading to more Sell and Hold ratings than Buys [10][11]. - The company is facing challenges from AI's impact on job placements, although its CEO argues that the effects are overstated for experienced roles [14][15]. - RHI's dividend payout is projected to exceed earnings significantly, with expected profits dropping by 45% this year [15]. Group 4: Cricut (CRCT) - Cricut boasts a high yield of 20.6% and operates as a creativity platform, but its profitability is declining despite recent dividend commitments [17][18]. - The company has seen a significant drop in stock price, leading to a yield increase, yet analysts are pessimistic about its future growth prospects [19][20]. - Revenue projections indicate potential stagnation or decline, particularly if economic conditions affect holiday sales, which are crucial for the company [21].

Revenue Performance - Total revenue decreased by $4.9 million, or 2.5%, for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to a decline in average occupancy from 86.0% to 84.5%[135] - Rental revenue decreased by $4.6 million, or 2.6%, for the three months ended September 30, 2025, attributed to the same decline in average occupancy and the sale of 12 self storage properties[136] - Total revenue decreased by $14.3 million, or 2.5%, for the nine months ended September 30, 2025, attributed to a decline in average occupancy from 85.8% to 83.8%[150] - Rental revenue decreased by $20.0 million, or 3.8%, for the nine months ended September 30, 2025, driven by lower average occupancy and the sale of self-storage properties[151] - Total rental revenue for the three months ended September 30, 2025, was $169.9 million, down from $174.5 million in 2024, reflecting a decrease of $4.6 million[176] Operating Expenses - Total operating expenses increased slightly by $0.7 million, or 0.6%, for the three months ended September 30, 2025, compared to the same period in 2024[134] - Property operating expenses increased by $6.5 million, or 4.1%, for the nine months ended September 30, 2025, compared to the same period in 2024[154] - Same store portfolio property operating expenses increased by $2.5 million, or 4.9%, for the three months ended September 30, 2025, driven by higher marketing, property tax, and utilities expenses[179] - Total property operating expenses for the nine months ended September 30, 2025, increased by $6.5 million, or 4.1%, compared to the same period in 2024[180] Net Income - Net income attributable to common shareholders for the three months ended September 30, 2025, was $13.31 million, a decrease of $0.28 million compared to the same period in 2024[134] - Net income for the three months ended September 30, 2025, was $29.0 million, slightly down from $29.8 million in 2024[184] - Net income attributable to common shareholders decreased from $79.5 million to $35.5 million for the nine months ended September 30, 2025[149] Funds from Operations (FFO) - Funds from operations (FFO) attributable to common shareholders for the three months ended September 30, 2025, was $75,070,000, down from $82,365,000 in 2024, a decline of 8.9%[168] - Core FFO for the nine months ended September 30, 2025, was $224,313,000, slightly down from $227,508,000 in 2024, indicating a decrease of 1.1%[168] - FFO per share for the three months ended September 30, 2025, was $0.56, down from $0.61 in 2024, a decrease of 8.2%[171] - Core FFO per share for the nine months ended September 30, 2025, was $1.66, compared to $1.84 in 2024, indicating a decline of 9.8%[171] Property and Portfolio Information - As of September 30, 2025, the company owned 807 self storage properties across 33 states and Puerto Rico, comprising approximately 51.6 million rentable square feet[126] - The company's unconsolidated real estate ventures currently own 262 properties, with a third-party interest valued at approximately $2.1 billion[127] - The company disposed of 12 self storage properties during the nine months ended September 30, 2025, and contributed 56 properties to the 2024 Joint Venture in the previous year[132] Cash Flow and Capital Expenditures - Operating cash flow decreased to $265.7 million for the nine months ended September 30, 2025, down from $282.9 million in the same period of 2024, primarily due to a decline in rental revenue and average occupancy dropping from 85.8% to 83.8%[197] - Cash provided by investing activities was $10.8 million for the nine months ended September 30, 2025, a significant decrease from $470.9 million in the same period of 2024, with $72.1 million from the sale of 12 self-storage properties[198] - Total capital expenditures increased to $26.6 million for the nine months ended September 30, 2025, compared to $13.5 million in 2024, with recurring capital expenditures at $15.7 million and value-enhancing expenditures at $9.7 million[200] Debt and Interest Rates - Interest expense increased by $7.4 million, or 6.4%, for the nine months ended September 30, 2025, due to the maturity of interest rate swaps and an increase in variable-rate debt from $186.8 million to $404.4 million[158] - The effective interest rates for outstanding loans as of September 30, 2025, were 4.11% for Term Loan D and 5.03% for Term Loan E[203] - As of September 30, 2025, the company had $404.4 million of debt subject to variable interest rates, which could impact future earnings by approximately $4.0 million annually with a 100 basis point change in reference rates[227] Shareholder Distributions - During the nine months ended September 30, 2025, the company paid $131.0 million in distributions to common shareholders and $15.3 million to preferred shareholders[219] - A cash dividend of $0.57 per common share and OP unit was declared, with a record date of September 15, 2025[220] - Cash distributions of $0.375 per Series A and B Preferred Shares were also declared, with the same record date of September 15, 2025[220] Market and Regulatory Environment - The self-storage business experiences seasonal fluctuations, with higher occupancy typically in July and lower in February, affecting revenue and profit realization[222] - Interest rate risk is the primary market risk, with the company using interest rate swaps to convert variable rate debt to fixed rates[226] - The enactment of the One Big Beautiful Bill Act (OBBB) on July 4, 2025, introduces major changes affecting the taxation of REITs and their investors[224]

Financial Data and Key Metrics Changes - The company reported Core FFO per share of $0.57 for Q3 2025, an 8% decline from the prior year, primarily due to a decrease in same-store NOI and an increase in interest expense [9] - Same-store revenues declined by 2.6%, driven by a lower average occupancy of 150 basis points and a year-over-year decline in average revenue per square foot of 40 basis points [9][10] - Expense growth was 4.9% in Q3, with property taxes, marketing, and utilities being the main drivers [10] Business Line Data and Key Metrics Changes - Rental revenue was down 2.2% year-over-year in Q3, an improvement from a negative 3.2% in the first half of 2025 [10] - The other property-related revenue line item faced a difficult comparison due to outsized performance in the previous year [10] Market Data and Key Metrics Changes - Contract rates in October improved by 160 basis points compared to the previous year, while occupancy ended October at 84.3%, down 170 basis points year-over-year [4][9] - The company is optimistic about the self-storage sector's outlook for 2026 and beyond, citing expected reductions in new supply and potential increases in storage demand due to lower mortgage rates [5] Company Strategy and Development Direction - The company is focusing on improving occupancy levels and revenue growth through increased marketing spend, competitive positioning, and solid execution of the sales process [8] - A preferred investment program was launched to enhance earnings growth and return to being a growth company [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position for 2026, citing improvements in occupancy levels and contract rates [19][20] - The company believes it has reached an inflection point, with positive momentum in same-store revenue growth and operational stability [6][7] Other Important Information - The company amended its credit facility agreement, resulting in nearly $1 million of annual interest savings [13] - The company maintains ample liquidity and healthy access to various sources of capital, with no significant debt maturities until the second half of 2026 [13] Q&A Session Summary Question: What makes the company confident compared to peers? - Management highlighted the structural improvements made over the past couple of years, including consolidating brands and operating platforms, which have positioned the company for better performance [17][19] Question: What is the outlook for capital recycling? - Management indicated ongoing efforts in capital recycling, with some properties currently on the market and a focus on operational efficiency and returns for shareholders [22][24] Question: How do improved street rates impact same-store revenue growth? - Management noted that closing the occupancy gap and positioning in the market will help drive revenue growth, with confidence in the ECRI strategy to maximize rate changes [28][29] Question: What are the demand drivers for the quarter? - Management observed that moving remains a top reason for storage usage, but there hasn't been a significant shift in housing-related demand despite lower mortgage rates [95] Question: Why not narrow guidance at this point? - Management explained that the historical approach has been to leave guidance unchanged unless there are material changes, allowing for a consistent outlook [97]