Safestore (LON:SAFE) Sets New 52-Week Low - Should You Sell?

Safestore Holdings Plc (LON:SAFE) experienced a significant drop in its share price, reaching a new 52-week low during mid-day trading on Monday. The stock dipped to GBX 578.50 ($7.15) before recovering slightly to last trade at GBX 600 ($7.41), with a total trading volume of 559,367 shares. Prior to this trading session, the stock had closed at GBX 601.50 ($7.43).

Stock Performance Overview

The share price of Safestore has seen a decline of 0.2%. Currently, the 50-day moving average stands at GBX 648.36, while the 200-day moving average is at GBX 772.17. The company's financial ratios show a debt-to-equity ratio of 42.94, a quick ratio of 0.90, and a current ratio of 0.42. With a market capitalization of £1.31 billion, the stock holds a PE ratio of 495.87, a price-to-earnings growth ratio of 2.05, and a beta of 0.86.

Safestore Holdings Plc recently released its earnings report on January 16th. The results revealed an earnings per share (EPS) of GBX 92.40 ($1.14) for the quarter. Notably, the company has a remarkable net margin of 118.32% and a return on equity of 13.58%. Analysts project that Safestore will have an EPS of approximately 42.69 for the current fiscal year.

Dividend Increase

In addition to its stock performance, Safestore also announced an increase in its dividend, which is scheduled to be paid on April 15th. Shareholders who are on record as of March 13th will receive a dividend of GBX 20.40 ($0.25), a notable increase from the previous dividend of $10.00. This new dividend reflects a yield of 3.42%, with an ex-dividend date also set for March 13th. Currently, the dividend payout ratio stands at a very high 2,479.34%.

Insider Transactions

In other recent developments, insider Avis Darzins purchased 1,581 shares of Safestore on January 16th. This purchase was made at an average price of GBX 628 ($7.76) per share, amounting to a total investment of £9,928.68 ($12,269.75). It is worth noting that corporate insiders currently hold about 2.77% of the company's stock.

Company Insights

Safestore is recognized as the largest self-storage company in the UK, boasting 190 stores as of October 31, 2023. This includes 133 wholly owned facilities in the UK, with 73 situated in London and the South East. The company also operates in major metropolitan areas, including Manchester, Birmingham, Glasgow, Edinburgh, Liverpool, Sheffield, Leeds, Newcastle, and Bristol. Additionally, Safestore has 29 wholly owned facilities in the Paris region and operates 11 stores in Spain, the Netherlands, and Belgium.

Conclusion

As Safestore shares hit a new low, investors are left wondering whether now is the time to sell or hold their position. The company's recent dividend increase may be a positive signal for some, while the high debt-to-equity ratio raises concerns for others. As analysts maintain a cautious outlook, weighing the risks and rewards is crucial.

Safestore, Stocks, Dividend