Digital Realty: "Enormous Opportunity" in Data

11/14/2017 5:00 am EST

Focus: REITS

Mark Skousen

Editor, Forecasts & Strategies, High-Income Alert

Based in San Francisco, Digital Realty Trust (DLR) is a data center solution provider for many of the world’s leading enterprises, explains growth and income expert Mark Skousen, editor of High-Income Alert.

The company offers everything from move-in-ready spaces with configurable power systems to state-of-the-art customized data centers. This is an enormous opportunity. Businesses, non-profit organizations and government agencies are all drowning in a sea of data.

There’s legal data, accounting data, tax data, product data and regulatory data. It may be in print or spreadsheet form (not to mention digital photographs, video and social media content, too). Some data are stacked in warehouses. Other quantities are stored on electronic devices. The rest resides “in the cloud” in cyberspace.

Why do so many businesses and non-profit organizations turn to Digital Realty? Its data centers are designed, built and operated by professionals with decades of experience. Its 170-plus properties in 11 cities on four continents are centered where customers need them.


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And the company has the financial strength to be a stable and reliable long-term partner. The numbers here are already excellent. Digital Realty took in $2.26 billion over the last 12 months. In the most recent quarter, earnings soared 56% on an 11% increase in revenue. Its operating margin tops 25%.

Digital Realty is organized as a real estate investment trust (REIT). This allows the company to avoid the corporate income tax and pass net income straight through to shareholders. So, you’ll collect a 3.2% dividend yield here. However, I see plenty of capital appreciation potential here, too.

Digital Realty has set the global standard for technical real estate, offering a unique ability to acquire, manage and scale-up data center campuses.

With the data universe growing exponentially, its centers are fast becoming the corporate world’s go-to storage solution. So, pick up Digital Realty Trust at market. And place a protective stop at $95.

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