Opinions Mike S. Newton, CIM FCSI
Digital Realty TrustDLRTOP PICKDec 05, 2017
Stock price when the opinion was issued
As of Jun 05, 2026. Market Open.
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Global data center REIT. AI buildout is the growth narrative. Recurring revenue comes from renting long-term leases, but many companies are building their own data centres. Neocloud companies have added improvements and efficiencies. This name is more like a landlord, so less volatile.
An OK compounder, but better ways to play.
One of the largest data centre REITs. Great company, growing nicely. Trades at discount to intrinsic value. Sweet spot in the cycle. AI is a further tailwind to all of this.
Data centre expansion will be massive over next 5 years. Biggest hindrance right now is land availability and power transmission, and this company has both.
AI is going to affect every job on the planet, so it will have to touch real estate in some manner. AI can help decrease operating costs in operationally intensive areas.
Data centre space is really exciting in this regard. Supplying power to data centres is the issue here. Those companies that have a great pipeline will do well.
Andrew MoffsLoves it. A more conservative play, not as volatile, since it pays out royalties as a REIT. 12-month price target of $185. If you don't like the REIT business model, then you should buy EQIX as a pure play.
Kim Bolton
Second-largest data centre REIT globally. Record industry leasing last quarter, 4 times as much as a year ago. Tenants are big tech, with lots of capital to put into data centres to support cloud rollout. Coming AI boom, will benefit. Pricing power. Over 5% internal growth annually, could be higher. Modest premium to NAV, and the NAV will increase over the years. Yield is 3.4%.
(Analysts’ price target is $147.70)Andrew MoffsOne of two pure plays on data centres. Beat on top and bottom raised guidance. 12-month price target of $162.50. Yield is 3.4%.
Owns most of its data centres, whereas EQIX has arrangements with customers. As well, EQIX stock went through the "death cross", which is usually not good.
Kim BoltonDLR is a fundamentally strong REIT, with expanding net profit margins and ROE, and it generates good free cash flows. Its yield is attractive, although its Funds From Operations (FFO) to debt have been declining over the past few years, indicating its debt levels have increased at a faster rate than FFO. It trades at a high valuation, but this can be justified given its strong fundamentals. Given a potential peak in interest rates, the underlying secular trend growth in the data center industry, and its strong fundamentals, we would be comfortable holding or adding slowly to this name.
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The chart shows a nice uptrend since late May, and coming after a 2-year downtrend before peaking at $180. It's a recovery story. Is there enough interest for this to break above $120 to $140? Watch weekly closes, rather than daily closes, because there are five data points in a week.
Varun Anand
The world is using an increasing amount of technology with Cloud spaced server space. This company bought a data Centre for about $4 billion recently, which gave them access to a lot of European property, a nice added bonus. Has about 150 data centres globally, and some of the biggest names in the S&P 500. To move this beyond just being a commodity of acreage of data farms, they are adding a level of IT consulting, which have higher margins. Has an effective tax rate of only 3%, so are not getting a lot of love in the last couple of days. Under this pressure, the shares represent a pretty good buying opportunity. Dividend yield of 3.4%. (Analysts’ price target is $127.)