Digital Realty Trust Inc's Dividend Analysis
An In-Depth Look at Digital Realty Trust Inc's Upcoming Dividend and Financial Health
Digital Realty Trust Inc (NYSE:DLR) recently announced a dividend of $1.22 per share, payable on 2024-03-28, with the ex-dividend date set for 2024-03-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Digital Realty Trust Inc's dividend performance and assess its sustainability.
What Does Digital Realty Trust Inc Do?
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Digital Realty Trust Inc operates over 300 data centers across the globe, offering a variety of services from retail co-location to full-scale "cold shells" for large cloud service providers. The company, which functions as a real estate investment trust, has shifted its focus towards delivering higher-level services, catering to clients' IT needs. With a significant footprint spanning five continents and nearly 40 million rentable square feet, Digital Realty Trust Inc is a key player in the data center space.
A Glimpse at Digital Realty Trust Inc's Dividend History
Since 2004, Digital Realty Trust Inc has established a reputation for consistent dividend payments, distributed quarterly. Recognized as a dividend achiever, the company has increased its dividend annually, marking a commendable track record of financial commitment to its shareholders.
Below is a chart showcasing the annual Dividends Per Share to track historical trends.
Breaking Down Digital Realty Trust Inc's Dividend Yield and Growth
Digital Realty Trust Inc boasts a trailing dividend yield of 3.33% and a forward dividend yield of 3.33%, indicating consistent dividend expectations over the next year. Over the past three years, the company's annual dividend growth rate was 2.90%, which climbs to 3.90% over a five-year period, and stands at 5.00% over the past decade.
Considering Digital Realty Trust Inc's dividend yield and five-year growth rate, the 5-year yield on cost for the company's stock is approximately 4.03%.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of Digital Realty Trust Inc's dividend can be gauged by examining the dividend payout ratio. With a ratio of 6.47 as of 2023-12-31, there are concerns about the sustainability of the company's dividend. However, the profitability rank of 7 out of 10 suggests robust earnings potential, supported by a decade of positive net income, which could mitigate these concerns.
Growth Metrics: The Future Outlook
Digital Realty Trust Inc's growth rank of 7 out of 10 indicates a strong trajectory when compared to its competitors. The company's revenue per share and 3-year revenue growth rate, averaging 6.00% annually, outperform 64.89% of global competitors. Additionally, the 3-year EPS growth rate of 11.70% per year and a 5-year EBITDA growth rate of -1.10%, which outperforms 38.75% of global competitors, further reinforce the company's capacity for sustained growth and dividends.
Concluding Insights on Digital Realty Trust Inc's Dividends
For value investors, Digital Realty Trust Inc presents an intriguing dividend profile, with a history of consistent growth and a forward-looking approach underscored by its robust profitability and growth metrics. While the payout ratio raises questions about dividend sustainability, the company's financial health and growth prospects suggest a capacity to maintain its dividend commitments. Investors should continue to monitor these aspects to make well-informed decisions regarding Digital Realty Trust Inc's dividends.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
