Digital Realty Trust, Inc. (NYSE: DLR)

Sector: Real Estate Industry: REIT - Specialty CIK: 0001297996
Market Cap 61.15 Bn
P/B 2.67
P/E 48.23
P/S 10.00
ROIC (Qtr) 1.72
Div Yield % 2.71
Rev 1y % (Qtr) 13.85
Total Debt (Qtr) 19.66 Bn
Debt/Equity (Qtr) 0.86
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About

Digital Realty Trust, Inc. (DLR) is a prominent player in the global data center industry, providing colocation, interconnection, and cloud-enablement services to a diverse range of customers. As a real estate investment trust (REIT) for U.S. federal income tax purposes, the company is headquartered in Austin, Texas, and operates a substantial portfolio of over 300 data center facilities in 54 metropolitan areas across 28 countries on six continents. At the heart of DLR's business activities is the provision of data center solutions tailored to...

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Investment thesis

Bull case

  • Operating cash flow of 2.41B provides exceptional 527.13x coverage of minority interest expenses 4.58M, showing strong core operations.
  • Operating cash flow of 2.41B provides strong 25.73x coverage of stock compensation 93.77M, indicating sustainable incentive practices.
  • Strong operating cash flow of 2.41B provides 4.27x coverage of SG&A expenses 565.48M, showing efficient operational cost management.
  • Cash position of 3.45B provides exceptional 754.29x coverage of minority interest expenses 4.58M, indicating strong liquidity.
  • Strong free cash flow of 850.58M provides 1.50x coverage of SG&A expenses 565.48M, indicating efficient cost management.

Bear case

  • Operating cash flow of 2.41B barely covers its investment activities of (2.23B), with a coverage ratio of -1.08, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 2.41B provides thin coverage of dividend payments of (1.73B) with a -1.40 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 3.45B provide limited coverage of acquisition spending of (686.93M), which is -5.02x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 1.78B show weak coverage of depreciation charges of 1.89B, with a 0.94 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 1.89B relative to operating cash flow of 2.41B, which is 0.79x suggests significant maintenance capital requirements affecting free cash flow.

Geographical Breakdown of Revenue (2025)

Product and Service Breakdown of Revenue (2025)

Peer comparison

Companies in the REIT - Specialty
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 EQIX Equinix Inc 93.20 Bn 69.03 10.11 22.73 Bn
2 AMT American Tower Corp /Ma/ 84.92 Bn 69.21 11.41 45.01 Bn
3 DLR Digital Realty Trust, Inc. 61.15 Bn 48.23 10.00 19.66 Bn
4 CCI Crown Castle Inc. 37.84 Bn 64.24 6.91 29.58 Bn
5 IRM Iron Mountain Inc 32.10 Bn 222.02 4.65 18.73 Bn
6 SBAC Sba Communications Corp 25.39 Bn 332.98 15.54 15.02 Bn
7 WY Weyerhaeuser Co 19.35 Bn 59.73 2.80 5.57 Bn
8 LAMR Lamar Advertising Co/New 12.52 Bn 427.65 10.32 4.79 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.57 1.49
EV to Cash from Ops. EV/CFO 32.07 23.58
EV to Debt EV to Debt 3.94 2.74
EV to EBIT EV/EBIT 43.49 32.67
EV to EBITDA EV/EBITDA 30.30 18.09
EV to Free Cash Flow [EV/FCF] EV/FCF 90.95 66.87
EV to Market Cap EV to Market Cap 1.27 2.19
EV to Revenue EV/Rev 12.66 9.81
Price to Book Value [P/B] P/B 2.67 0.95
Price to Earnings [P/E] P/E 48.23 70.17
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.72 3.96
Dividend Payout Ratio % Div Payout % (Qtr) 130.80 112.65
Dividend per Basic Share Div per Share (Qtr) 4.88 3.59
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 194.97 187.43
Interest Coverage Int. cover (Qtr) 4.06 4.10
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -46.36 12.53
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -10.83 105.31
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 27.11
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 70.60 44.10
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 13.79 -3.90
EBIT Growth (1y) % EBIT 1y % (Qtr) 60.22 45.16
EBT Growth (1y) % EBT 1y % (Qtr) 103.98 209.40
EPS Growth (1y) % EPS 1y % (Qtr) 114.37 198.65
FCF Growth (1y) % FCF 1y % (Qtr) -28.80 -130.11
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 11.40 5.54
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.12 0.20
Cash Payout Ratio Cash Payout (Qtr) 0.44 0.17
Cash Ratio Cash Ratio 0.00 0.30
Current Ratio Current Ratio 0.00 0.62
Debt to Equity Ratio Debt/Equity (Qtr) 0.86 1.20
Interest Cover Ratio Int Coverage (Qtr) 4.06 4.10
Times Interest Earned Times Interest Earned (Qtr) 4.06 4.10
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 60.10 59.74
EBIT Margin % EBIT Margin % (Qtr) 29.10 40.99
EBT Margin % EBT Margin % (Qtr) 21.93 18.94
Gross Margin % Gross Margin % (Qtr) 59.00 65.41
Net Profit Margin % Net Margin % (Qtr) 20.70 14.71