Yahoo Finance Digital Realty Trust Inc's Dividend Analysis
Exploring the Sustainability and Growth of Dividends at Digital Realty Trust Inc
Introduction to Digital Realty Trust Inc's Upcoming Dividend
Digital Realty Trust Inc (NYSE:DLR) recently announced a dividend of $1.22 per share, payable on June 28, 2024, with the ex-dividend date set for June 14, 2024. 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?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Digital Realty owns and operates over 300 data centers worldwide, encompassing nearly 40 million rentable square feet across five continents. Digital's offerings range from retail co-location, where an enterprise may rent a single cabinet and rely on Digital to provide all the accommodations, to "cold shells," where hyperscale cloud service providers can simply rent much, or all, of a barren, power-connected building. In recent years, Digital Realty has de-emphasized cold shells and now primarily provides higher-level service to tenants, which outsource their related IT needs to Digital. The company operates as a real estate investment trust.
A Glimpse at Digital Realty Trust Inc's Dividend History
Digital Realty Trust Inc has maintained a consistent dividend payment record since 2004, distributing dividends on a quarterly basis. The company has increased its dividend each year since 2004, earning it the status of a dividend achiever. This honor is given to companies that have increased their dividend each year for at least the past 20 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Digital Realty Trust Inc's Dividend Yield and Growth
As of today, Digital Realty Trust Inc currently has a 12-month trailing dividend yield of 3.25% and a 12-month forward dividend yield of 3.25%, suggesting an expectation of same dividend payments over the next 12 months. Over the past three years, Digital Realty Trust Inc's annual dividend growth rate was 2.90%. Extended to a five-year horizon, this rate increased to 3.90% per year. And over the past decade, Digital Realty Trust Inc's annual dividends per share growth rate stands at 5.00%. Based on Digital Realty Trust Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Digital Realty Trust Inc stock as of today is approximately 3.94%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of March 31, 2024, Digital Realty Trust Inc's dividend payout ratio is 7.69, suggesting that the company's dividend may not be sustainable. Digital Realty Trust Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Digital Realty Trust Inc's profitability 7 out of 10 as of March 31, 2024, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Digital Realty Trust Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Digital Realty Trust Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Digital Realty Trust Inc's revenue has increased by approximately 6.00% per year on average, a rate that outperforms approximately 57.58% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Digital Realty Trust Inc's earnings increased by approximately 11.70% per year on average, a rate that outperforms approximately 58.48% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -1.10%, which outperforms approximately 38.31% of global competitors.
Conclusion
In conclusion, Digital Realty Trust Inc's consistent dividend growth, coupled with a robust payout ratio and strong profitability metrics, presents a compelling case for investors looking for sustainable income. The company's solid growth metrics further assure the potential for continued dividend increases. Investors seeking to diversify their portfolios with high-dividend yield stocks should consider Digital Realty Trust Inc as a viable option. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
