CubeSmart (NYSE:CUBE) provides an attractive source of income, but in order to decide if the dividend payments can be maintained over time, investors must go beyond the dividend yield. The self-storage REIT has more than 1,500 properties throughout the United States and serves both residential and commercial customers. Because of its scale and third-party management business, it has some diversification, though property-level costs and borrowing expenses remain significant risks. Investors exploring similar income opportunities can also check our 52-week low dividend stocks list.
CubeSmart currently pays a quarterly dividend of $0.53 per share, which amounts to $2.12 per year. With a share price of $37.71, this results in a forward yield of about 5.6%. The income is important, especially for investors who are looking for regular dividend payments, but the company’s most recent operating results indicate that any future increases in the dividend will have to rely on a recovery in margins rather than on revenue growth alone.
Also read: Dividend Stock Portfolio for Income: 15 Stocks to Invest In
Earnings growth is not yet supporting a faster dividend increase
CubeSmart’s mixed earnings in the second quarter of 2026 showed that revenue from its portfolio of 623 stores rose by 0.8% compared with the previous year, although operating expenses increased by 4.4%, which caused net operating income (NOI) to fall by 0.7%. Average occupancy was 90.4% and rose to 91.0% by the end of the quarter. While higher occupancy and higher prices for new customers are encouraging, these factors have not yet led to improved profitability at the property level.
Adjusted funds from operations (FFO), a key performance figure for REITs, dropped by 3.1% to $0.63 per diluted share. The company expects adjusted FFO for 2026 to be in the range of $2.54 to $2.60 per share, which would mean a dividend payout ratio of about 82% at the midpoint. This provides a reasonable buffer, though poorer operating results could reduce it. The difference is important in that the annual dividend is above the projected GAAP earnings per share of $1.61, but real estate depreciation causes GAAP earnings to be less useful when evaluating a REIT’s ability to make distributions.
Dividend growth is also declining. In 2026, CubeSmart increased its quarterly dividend from $0.52 to $0.53, a rise of about 1.9%, similar to 2025. Although the company has achieved 16 consecutive annual increases, which is a strong record, the rate of recent growth is modest. Check other dividend growth stocks with similar dividend growth streaks and high yields in our recent article.
The income is attractive, but the upside needs justification
CUBE is trading at a forward P/E of 24.45x, and its trailing P/E is 26.23x. The corresponding forward earnings yield is approximately 4.1%. For a property-owning REIT, the trailing P/E is of limited use since depreciation reduces reported earnings. The forward multiple too has to be considered: at the midpoint, the projected EPS of $1.61 is only slightly higher than the previous year’s earnings level, so investors should not expect a significant rise in earnings.
CubeSmart’s five-year average P/E has been about 28.6, suggesting its current implied multiple is below its historical average. However, that discount does not automatically mean it is a good investment when operating margins are being pressed. The forward earnings yield of 4.3% is also lower than the about 5.1% yield on 10-year U.S. Treasuries, as of October 16, 2026. Although CubeSmart’s dividend yield of 5.6% provides a greater immediate cash return, unlike Treasury income, it involves property, leverage, and share price risk.
Take a look at: 13 Best REIT Dividend Stocks to Invest in
Conclusion
CubeSmart’s dividend is reasonably covered by the projected FFO, and with a yield of 5.6% it is an attractive option for an investment portfolio seeking income. However, the increasing expenses, the slower rate of dividend growth, and the fact that Treasury yields are now above its forward earnings yield all limit the stock’s risk-adjusted appeal. The best argument in favor of the share is based on an improvement in NOI and on renewed FFO growth, rather than just the fact that its P/E is lower than historical levels.
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This article is originally published at Insider Monkey.
