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PS Business Parks, Inc.NYSE:PSB Stock Report

Market Cap US$6.5b
Share Price
n/a
1Y21.1%
7D0.2%
1D0.03%
Portfolio Value
​
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PS Business Parks, Inc.

NYSE:PSB Stock Report

Market Cap: US$6.5b

This company has been acquired

The company may no longer be operating, as it has been acquired. Find out why through their latest events.

PS Business Parks (PSB) Stock Overview

PS Business Parks, Inc., a member of the S&P MidCap 400, is a REIT that acquires, develops, owns, and operates commercial properties, primarily multi-tenant industrial, flex, and office space. More details

PSB fundamental analysis
Snowflake Score
Valuation4/6
Future Growth0/6
Past Performance5/6
Financial Health6/6
Dividends5/6

Rewards

Trading at 17.3% below our estimate of its fair value

Earnings grew by 257.8% over the past year

Pays a reliable dividend of 2.24%

Risk Analysis

Earnings are forecast to decline by an average of 41.1% per year for the next 3 years

Large one-off items impacting financial results


PSB Community Fair Values

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PS Business Parks, Inc. Competitors

Price History & Performance

Summary of share price highs, lows and changes for PS Business Parks
Historical stock prices
Current Share PriceUS$187.44
52 Week HighUS$189.83
52 Week LowUS$149.58
Beta0.44
1 Month Change0.82%
3 Month Change9.78%
1 Year Change21.15%
3 Year Change6.23%
5 Year Change43.30%
Change since IPO687.15%

Recent News & Updates

Seeking Alpha • Jul 08

PS Business Parks declares $5.25 dividend in connection with pending transaction

PS Business Parks (NYSE:PSB) declares $5.25/share quarterly dividend. Forward yield 11.22% Payable July 20; for shareholders of record July 19; ex-div July 18. Company merger will be entitled to receive an aggregate of $187.716848 per share in cash, consisting of (i) $187.50, representing the $5.25 closing cash dividend and the merger consideration of $187.50 per share as reduced by the $5.25 closing cash dividend plus (ii) the $0.216848 pro rata dividend. See PSB Dividend Scorecard, Yield Chart, & Dividend Growth.
Seeking Alpha • Jun 29

PS Business Parks Will Disappear, But What With The Preferred Shares?

PS Business Parks has accepted an all-cash offer from Blackstone, and as a go-shop period did not result in higher offers, this likely is a 'done deal'. The preferred shares saw their prices decrease on the back of higher interest rates and increased uncertainty related to the delisting of PS Business Parks. Although the preferred shares will remain outstanding, the main risk is related to how Blackstone will run PSB's balance sheet. Adding debt to the currently pristine balance sheet could reduce the asset coverage ratio and the preferred dividend coverage ratio. Introduction PS Business Parks, Inc. (PSB) is on its way to a delisting as its main shareholder, Public Storage (PSA), has agreed to tender its stake to Blackstone Inc. (BX), which made an all-cash offer to acquire PS Business Parks. While the common shares will be delisted, the acquirer is not planning to call the preferred shares and those securities will remain outstanding. Data by YCharts The Sale Of PS Business Parks To Blackstone Is A Given I had PS Business Parks on my radar, mainly for the preferred shares, but I was also quite charmed by the very conservative balance sheet, which made me consider initiating a long position in its common shares as well. Unfortunately, before I could even think about pulling the trigger, Blackstone announced it had entered into an agreement to acquire all shares of PS Business Parks for a cash payment of $187.50. The main shareholder, Public Storage, agreed to tender its shares at that price, and the only thing that could block the sale was the 30-day “go shop” period where PS Business Parks could actively solicit offers superior to the Blackstone all-cash bid. That “go shop” period ended at the end of May, and no superior offer came up, so there’s no reason for anyone to vote against this deal; after all, PSB was allowed to solicit higher offers, but nothing came along. And now, the interest rates have increased even further. I can’t imagine the appetite has increased for other parties to submit a superior offer which would have to be all-cash as well, unless a share deal with a much higher premium would be launched. For instance, a $188/share all-stock offer would likely not be deemed superior to $187.50 in cash by the PSB board of directors. So, the sale of PS Business Parks to Blackstone seems to be a done deal. Although the PSB share price is trading at a discount to the offer, said discount is very small and does not pose superior returns compared to bonds these days, so the market also seems to believe the deal is going ahead. The Preferred Shares Offer An Attractive Yield, But The Risks Are Increasing Before I was even considering going long the common units, I was looking at PS Business Parks from the perspective of a preferred shareholder. There are currently three series of preferred share outstanding, with different preferred dividend payments. Stockwatch.com The Z-series have the highest yield at 6.91%, followed by the Y-shares (6.91%) and the X-series (6.7%). So although the preferred dividend payments in absolute dollar amounts are the lowest, the current low share price of the Z-series makes this series the most attractive one. So first of all, allow me to explain how strong the preferred dividend coverage ratio is. Let’s first have a look at the REIT’s FFO and FAD (‘Funds Available for Distribution’) in the first quarter of this year. PSB Investor Relations As you can see, the FAD was approximately $50.2M, and this already includes in excess of $5M in recurring capital improvements and tenant improvements. Also keep in mind, the starting point of this calculation is the net income allocable to common stockholders. This means the starting point already includes the impact of all preferred dividend payments, and if we take a step back and have a look at the income statement, we see the total amount paid out as preferred dividends was $9.6M. PSB Investor Relations If we add this back to the equation, PSB generated almost exactly $60M in pre-preferred dividend FAD, which means the preferred dividends are very handsomely covered by a factor of in excess of 600%. That’s great, and it explains why PSB was able to issue these perpetual securities with such a low preferred dividend yield (ranging from 4.875% to 5.25%). I was even more impressed with PSB’s balance sheet, which barely contained any debt: the $20M credit facility is just a fraction of the cash position and the cash position takes care of almost all liabilities (which means there’s about $53M in other assets like rent receivable to cover the shortfall. PSB Investor Relations This also means the preferred shareholders are first in line to be made whole in case something would go terribly wrong. The total equity value of the balance sheet was $1.78B, of which $755M was attributable to the preferred shares. Perhaps even more important is the accumulated depreciation on the assets to the tune of almost $1.2B, which means that excluding this accumulated depreciation, the book value would be closer to $3B for an asset coverage ratio of almost 400%. That’s why I was very interested in the preferred shares of PS Business Parks before the buyout offer was announced.
Seeking Alpha • Mar 18

PS Business Parks: Not Any Better An Opportunity

PS Business Parks has continued attractive performance from a fundamental perspective. Even so, shares have taken a step back with the broader market and the losses haven't been pretty. This is the downside of a pricey firm, but given the quality of the operation, it is still likely a 'hold' at this time.

Recent updates

Seeking Alpha • Jul 08

PS Business Parks declares $5.25 dividend in connection with pending transaction

PS Business Parks (NYSE:PSB) declares $5.25/share quarterly dividend. Forward yield 11.22% Payable July 20; for shareholders of record July 19; ex-div July 18. Company merger will be entitled to receive an aggregate of $187.716848 per share in cash, consisting of (i) $187.50, representing the $5.25 closing cash dividend and the merger consideration of $187.50 per share as reduced by the $5.25 closing cash dividend plus (ii) the $0.216848 pro rata dividend. See PSB Dividend Scorecard, Yield Chart, & Dividend Growth.
Seeking Alpha • Jun 29

PS Business Parks Will Disappear, But What With The Preferred Shares?

PS Business Parks has accepted an all-cash offer from Blackstone, and as a go-shop period did not result in higher offers, this likely is a 'done deal'. The preferred shares saw their prices decrease on the back of higher interest rates and increased uncertainty related to the delisting of PS Business Parks. Although the preferred shares will remain outstanding, the main risk is related to how Blackstone will run PSB's balance sheet. Adding debt to the currently pristine balance sheet could reduce the asset coverage ratio and the preferred dividend coverage ratio. Introduction PS Business Parks, Inc. (PSB) is on its way to a delisting as its main shareholder, Public Storage (PSA), has agreed to tender its stake to Blackstone Inc. (BX), which made an all-cash offer to acquire PS Business Parks. While the common shares will be delisted, the acquirer is not planning to call the preferred shares and those securities will remain outstanding. Data by YCharts The Sale Of PS Business Parks To Blackstone Is A Given I had PS Business Parks on my radar, mainly for the preferred shares, but I was also quite charmed by the very conservative balance sheet, which made me consider initiating a long position in its common shares as well. Unfortunately, before I could even think about pulling the trigger, Blackstone announced it had entered into an agreement to acquire all shares of PS Business Parks for a cash payment of $187.50. The main shareholder, Public Storage, agreed to tender its shares at that price, and the only thing that could block the sale was the 30-day “go shop” period where PS Business Parks could actively solicit offers superior to the Blackstone all-cash bid. That “go shop” period ended at the end of May, and no superior offer came up, so there’s no reason for anyone to vote against this deal; after all, PSB was allowed to solicit higher offers, but nothing came along. And now, the interest rates have increased even further. I can’t imagine the appetite has increased for other parties to submit a superior offer which would have to be all-cash as well, unless a share deal with a much higher premium would be launched. For instance, a $188/share all-stock offer would likely not be deemed superior to $187.50 in cash by the PSB board of directors. So, the sale of PS Business Parks to Blackstone seems to be a done deal. Although the PSB share price is trading at a discount to the offer, said discount is very small and does not pose superior returns compared to bonds these days, so the market also seems to believe the deal is going ahead. The Preferred Shares Offer An Attractive Yield, But The Risks Are Increasing Before I was even considering going long the common units, I was looking at PS Business Parks from the perspective of a preferred shareholder. There are currently three series of preferred share outstanding, with different preferred dividend payments. Stockwatch.com The Z-series have the highest yield at 6.91%, followed by the Y-shares (6.91%) and the X-series (6.7%). So although the preferred dividend payments in absolute dollar amounts are the lowest, the current low share price of the Z-series makes this series the most attractive one. So first of all, allow me to explain how strong the preferred dividend coverage ratio is. Let’s first have a look at the REIT’s FFO and FAD (‘Funds Available for Distribution’) in the first quarter of this year. PSB Investor Relations As you can see, the FAD was approximately $50.2M, and this already includes in excess of $5M in recurring capital improvements and tenant improvements. Also keep in mind, the starting point of this calculation is the net income allocable to common stockholders. This means the starting point already includes the impact of all preferred dividend payments, and if we take a step back and have a look at the income statement, we see the total amount paid out as preferred dividends was $9.6M. PSB Investor Relations If we add this back to the equation, PSB generated almost exactly $60M in pre-preferred dividend FAD, which means the preferred dividends are very handsomely covered by a factor of in excess of 600%. That’s great, and it explains why PSB was able to issue these perpetual securities with such a low preferred dividend yield (ranging from 4.875% to 5.25%). I was even more impressed with PSB’s balance sheet, which barely contained any debt: the $20M credit facility is just a fraction of the cash position and the cash position takes care of almost all liabilities (which means there’s about $53M in other assets like rent receivable to cover the shortfall. PSB Investor Relations This also means the preferred shareholders are first in line to be made whole in case something would go terribly wrong. The total equity value of the balance sheet was $1.78B, of which $755M was attributable to the preferred shares. Perhaps even more important is the accumulated depreciation on the assets to the tune of almost $1.2B, which means that excluding this accumulated depreciation, the book value would be closer to $3B for an asset coverage ratio of almost 400%. That’s why I was very interested in the preferred shares of PS Business Parks before the buyout offer was announced.
Seeking Alpha • Mar 18

PS Business Parks: Not Any Better An Opportunity

PS Business Parks has continued attractive performance from a fundamental perspective. Even so, shares have taken a step back with the broader market and the losses haven't been pretty. This is the downside of a pricey firm, but given the quality of the operation, it is still likely a 'hold' at this time.
Seeking Alpha • Nov 25

PS Business Parks: High Quality Persists, But Shares Are Even More Expensive Than Before

PS Business Parks continues to demonstrate that it's a high quality player in its space. The overall risk profile of the business is favorable and its long-term outlook is encouraging. But given how pricey shares are today, there are better prospects to be had.
Seeking Alpha • Aug 27

PS Business Parks: Shareholders Rule This Kingdom

PS Business Parks is a high-quality REIT that carries no debt on its balance sheet. It's seeing strong signs of an uptick in demand, with growth in cash rental rates. I also highlight the dividend, valuation, and show why it's currently a Buy.

Shareholder Returns

PSBUS REITsUS Market
7D0.2%1.5%-2.5%
1Y21.1%9.1%20.1%

Return vs Industry: PSB exceeded the US REITs industry which returned -12.3% over the past year.

Return vs Market: PSB exceeded the US Market which returned -17.2% over the past year.

Price Volatility

Is PSB's price volatile compared to industry and market?
PSB volatility
PSB Average Weekly Movement3.5%
REITs Industry Average Movement3.3%
Market Average Movement7.2%
10% most volatile stocks in US Market16.7%
10% least volatile stocks in US Market3.1%

Stable Share Price: PSB has not had significant price volatility in the past 3 months.

Volatility Over Time: PSB's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1990156Steve Wilsonwww.psbusinessparks.com

PS Business Parks, Inc., a member of the S&P MidCap 400, is a REIT that acquires, develops, owns, and operates commercial properties, primarily multi-tenant industrial, flex, and office space. As of September 30, 2020, the Company wholly owned 27.5 million rentable square feet with approximately 5,000 commercial customers in six states. The Company also held a 95.0% interest in a 395-unit apartment complex and a 98.2% interest in a development of a 411-unit multifamily apartment complex.

PS Business Parks, Inc. Fundamentals Summary

How do PS Business Parks's earnings and revenue compare to its market cap?
PSB fundamental statistics
Market capUS$6.55b
Earnings (TTM)US$468.68m
Revenue (TTM)US$445.04m
11.1x
P/E Ratio
11.6x
P/S Ratio

Is PSB overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report (TTM)
PSB income statement (TTM)
RevenueUS$445.04m
Cost of RevenueUS$132.53m
Gross ProfitUS$312.51m
Other Expenses-US$156.16m
EarningsUS$468.68m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)16.96
Gross Margin70.22%
Net Profit Margin105.31%
Debt/Equity Ratio0.9%

How did PSB perform over the long term?

See historical performance and comparison

Dividends

2.2%
Current Dividend Yield
68%
Payout Ratio

Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2022/07/20 09:25
End of Day Share Price 2022/07/19 00:00
Earnings2022/06/30
Annual Earnings2021/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

PS Business Parks, Inc. is covered by 6 analysts. 1 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Christopher LucasBaird
Michael BilermanCitigroup Inc
Anthony PaoloneJ.P. Morgan