Critical Contrast: Douglas Emmett (DEI) vs. Digital Realty Trust (DLR)
Douglas Emmett (NYSE: DEI) and Digital Realty Trust (NYSE:DLR) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.
This table compares Douglas Emmett and Digital Realty Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Digital Realty Trust||21.27%||12.39%||4.15%|
Risk and Volatility
Douglas Emmett has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, Digital Realty Trust has a beta of 0.01, indicating that its share price is 99% less volatile than the S&P 500.
This is a breakdown of recent recommendations and price targets for Douglas Emmett and Digital Realty Trust, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Digital Realty Trust||0||9||7||0||2.44|
Douglas Emmett presently has a consensus target price of $39.71, suggesting a potential downside of 1.99%. Digital Realty Trust has a consensus target price of $122.00, suggesting a potential downside of 1.52%. Given Digital Realty Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Digital Realty Trust is more favorable than Douglas Emmett.
Insider and Institutional Ownership
96.1% of Douglas Emmett shares are owned by institutional investors. 17.8% of Douglas Emmett shares are owned by company insiders. Comparatively, 0.4% of Digital Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Douglas Emmett pays an annual dividend of $0.92 per share and has a dividend yield of 2.3%. Digital Realty Trust pays an annual dividend of $3.72 per share and has a dividend yield of 3.0%. Douglas Emmett pays out 155.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Digital Realty Trust pays out 148.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Douglas Emmett has raised its dividend for 6 consecutive years and Digital Realty Trust has raised its dividend for 12 consecutive years. Digital Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Douglas Emmett and Digital Realty Trust’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Douglas Emmett||$788.75 million||8.37||$481.47 million||$0.59||68.68|
|Digital Realty Trust||$2.26 billion||8.89||$1.22 billion||$2.51||49.35|
Digital Realty Trust has higher revenue and earnings than Douglas Emmett. Digital Realty Trust is trading at a lower price-to-earnings ratio than Douglas Emmett, indicating that it is currently the more affordable of the two stocks.
Digital Realty Trust beats Douglas Emmett on 13 of the 17 factors compared between the two stocks.
Douglas Emmett Company Profile
Douglas Emmett, Inc. is a self-administered and self-managed real estate investment trust (REIT). The Company is owner and operator of office and multifamily properties located in submarkets in Los Angeles and Honolulu. The Company operates through two segments: the acquisition, development, ownership and management of office real estate (Office Segment), and the acquisition, development, ownership and management of multifamily real estate (Multifamily Segment). The services for its Office segment include primarily rental of office space and other tenant services, including parking and storage space rental. The services for its Multifamily segment include primarily rental of apartments and other tenant services, including parking and storage space rental. It focuses on owning, acquiring developing and managing a substantial share of office properties and multifamily communities in neighborhoods.
Digital Realty Trust Company Profile
Digital Realty Trust, Inc. is a real estate investment trust (REIT). The Company is engaged in the business of owning, acquiring, developing and operating data centers. The Company is focused on providing data center and colocation solutions for domestic and international tenants across a range of industry verticals ranging from financial services, cloud and information technology services, to manufacturing, energy, healthcare and consumer products. As of December 31, 2016, its portfolio consisted of 145 operating properties, including 14 properties held as investments in unconsolidated joint ventures, of which 104 are located throughout the United States, 32 are located in Europe, four are located in Asia, three are located in Australia and two are located in Canada. It is a general partner of Digital Realty Trust, L.P. As of December 31, 2016, it owned an approximate 98.5% common general partnership interest in Digital Realty Trust, L.P.
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