Digital Realty Trust (DLR)

(A Top Pick Dec 06/19, Up 22%) Carrier-neutral data centre. Now prefers Equinix. 12-month price target of $165.50, so there's still some runway.

Equinix vs. Digital Realty They're both the largest US data centres. Equinix focuses on interconnection and co-location, housing thousands of businesses within the same business centre. Digital Realty focuses on hyperscale, which provides buildings and server racks for megacaps like Google. The latter business has fewer barriers to entry and is far more competitive with less pricing power. He prefers Equinix's model.

He does not own DLR presently, but has in the past. They are involved in the data centre business. He currently owns EQIX, who partnered with BCE to manage their data centres. If you own DLR, stick with it. If you are looking at getting into the space, consider EQIX.

This is a data centre play for big players (like Amazon) and is a REIT. It has had a recent pullback, so he is recommending it. They just bought a Dutch information services company and thinks this will be very positive. Yield 3.62% (Analysts’ price target is $133.00)

(A Top Pick Nov 8/16. Up 23%.) This is in the hot data centre space. The demand for server farms offloading in iCloud is insatiable. This is a real estate investment trust. It dropped 6% on the day of the tax accord as it has an effective tax rate of 2%. He would still be buying this name.

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.)

This is everything in Cloud computing. It is the largest data center provider with 156 clients. They have a 93% occupancy rate in their global properties and have grown their dividend quite strongly. Dividend yield of 3.1%. (Analysts’ price target is $116.)

A datacentre REIT, taking advantage of this whole iCloud phenomenon. It has gone down, completely in line with the broader REIT space. The demand in that space continues to completely outpace the capacity of the Digital Realty Trust. This is one opportunity presenting itself because of the election. Dividend yield of 3.71%.