Contrasting Digital Realty Trust (NYSE:DLR) & W.P. Carey (NYSE:WPC)

Digital Realty Trust (NYSE:DLR) and W.P. Carey (NYSE:WPC) are both large-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Institutional and Insider Ownership

99.7% of Digital Realty Trust shares are held by institutional investors. Comparatively, 73.7% of W.P. Carey shares are held by institutional investors. 0.1% of Digital Realty Trust shares are held by company insiders. Comparatively, 0.9% of W.P. Carey shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Digital Realty Trust and W.P. Carey’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Digital Realty Trust	21.41%	5.88%	2.73%
W.P. Carey	27.17%	5.67%	2.62%

Risk & Volatility

Digital Realty Trust has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500. Comparatively, W.P. Carey has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Dividends

Digital Realty Trust pays an annual dividend of $4.88 per share and has a dividend yield of 2.8%. W.P. Carey pays an annual dividend of $3.68 per share and has a dividend yield of 5.1%. Digital Realty Trust pays out 135.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W.P. Carey pays out 174.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W.P. Carey has increased its dividend for 2 consecutive years. W.P. Carey is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings for Digital Realty Trust and W.P. Carey, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Digital Realty Trust	0	8	16	2	2.77
W.P. Carey	1	7	2	0	2.10

Digital Realty Trust presently has a consensus price target of $192.33, indicating a potential upside of 9.50%. W.P. Carey has a consensus price target of $70.00, indicating a potential downside of 3.25%. Given Digital Realty Trust’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Digital Realty Trust is more favorable than W.P. Carey.

Earnings & Valuation

This table compares Digital Realty Trust and W.P. Carey”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Digital Realty Trust	$6.11 billion	9.87	$1.31 billion	$3.60	48.79
W.P. Carey	$1.72 billion	9.24	$466.36 million	$2.11	34.29

Digital Realty Trust has higher revenue and earnings than W.P. Carey. W.P. Carey is trading at a lower price-to-earnings ratio than Digital Realty Trust, indicating that it is currently the more affordable of the two stocks.

Summary

Digital Realty Trust beats W.P. Carey on 14 of the 18 factors compared between the two stocks.

About Digital Realty Trust

Digital Realty Trust, Inc. operates as a real estate investment trust, which engages in the provision of data center, colocation and interconnection solutions. It serves the following industries: artificial intelligence (AI), networks, cloud, digital media, mobile, financial services, healthcare, and gaming. The company was founded on March 9, 2004, and is headquartered in Dallas, TX.

About W.P. Carey

W. P. Carey ranks among the largest net lease REITs with a well-diversified portfolio of high-quality, operationally critical commercial real estate, which includes 1,424 net lease properties covering approximately 173 million square feet and a portfolio of 89 self-storage operating properties as of December 31, 2023. With offices in New York, London, Amsterdam and Dallas, the company remains focused on investing primarily in single-tenant, industrial, warehouse and retail properties located in the U.S. and Northern and Western Europe, under long-term net leases with built-in rent escalations.