Critical Contrast: Digital Realty Trust (NYSE:DLR) and Its Rivals

Digital Realty Trust (NYSE: DLR) is one of 75 public companies in the “Commercial REITs” industry, but how does it contrast to its competitors? We will compare Digital Realty Trust to similar companies based on the strength of its earnings, analyst recommendations, dividends, risk, profitability, institutional ownership and valuation.

Valuation & Earnings

This table compares Digital Realty Trust and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Digital Realty Trust $2.14 billion $426.18 million 95.46
Digital Realty Trust Competitors $536.81 million $100.12 million 453.78

Digital Realty Trust has higher revenue and earnings than its competitors. Digital Realty Trust is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Volatility & Risk

Digital Realty Trust has a beta of -0.09, meaning that its share price is 109% less volatile than the S&P 500. Comparatively, Digital Realty Trust’s competitors have a beta of 0.79, meaning that their average share price is 21% less volatile than the S&P 500.

Insider and Institutional Ownership

71.6% of shares of all “Commercial REITs” companies are held by institutional investors. 0.4% of Digital Realty Trust shares are held by insiders. Comparatively, 7.5% of shares of all “Commercial REITs” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Digital Realty Trust and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digital Realty Trust 11.71% 5.15% 1.97%
Digital Realty Trust Competitors 51.89% 6.65% 3.80%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Digital Realty Trust and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digital Realty Trust 0 9 6 0 2.40
Digital Realty Trust Competitors 656 2591 2212 23 2.29

Digital Realty Trust presently has a consensus target price of $125.08, suggesting a potential upside of 6.53%. As a group, “Commercial REITs” companies have a potential upside of 8.29%. Given Digital Realty Trust’s competitors higher possible upside, analysts clearly believe Digital Realty Trust has less favorable growth aspects than its competitors.

Dividends

Digital Realty Trust pays an annual dividend of $3.72 per share and has a dividend yield of 3.2%. Digital Realty Trust pays out 302.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Commercial REITs” companies pay a dividend yield of 3.9% and pay out 187.4% of their earnings in the form of a dividend. Digital Realty Trust has raised its dividend for 12 consecutive years. Digital Realty Trust lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Digital Realty Trust competitors beat Digital Realty Trust on 12 of the 15 factors compared.

Digital Realty Trust Company Profile

Digital Realty Trust, Inc. is a real estate investment trust (REIT). The Company is engaged in the business of owning, acquiring, developing and operating data centers. The Company is focused on providing data center and colocation solutions for domestic and international tenants across a range of industry verticals ranging from financial services, cloud and information technology services, to manufacturing, energy, healthcare and consumer products. As of December 31, 2016, its portfolio consisted of 145 operating properties, including 14 properties held as investments in unconsolidated joint ventures, of which 104 are located throughout the United States, 32 are located in Europe, four are located in Asia, three are located in Australia and two are located in Canada. It is a general partner of Digital Realty Trust, L.P. As of December 31, 2016, it owned an approximate 98.5% common general partnership interest in Digital Realty Trust, L.P.

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