Digital Realty Trust (DLR) & Resource Capital (RSO) Head to Head Analysis
Digital Realty Trust (NYSE: DLR) and Resource Capital (NYSE:RSO) are both financials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, institutional ownership, risk and profitability.
Valuation and Earnings
This table compares Digital Realty Trust and Resource Capital’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Digital Realty Trust||$2.14 billion||10.98||$426.18 million||$1.23||93.06|
|Resource Capital||$62.68 million||4.82||-$30.36 million||$0.27||35.63|
This table compares Digital Realty Trust and Resource Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Digital Realty Trust||11.71%||5.15%||1.97%|
Volatility and Risk
Digital Realty Trust has a beta of -0.1, suggesting that its stock price is 110% less volatile than the S&P 500. Comparatively, Resource Capital has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500.
Insider and Institutional Ownership
98.5% of Digital Realty Trust shares are held by institutional investors. Comparatively, 50.2% of Resource Capital shares are held by institutional investors. 0.4% of Digital Realty Trust shares are held by company insiders. Comparatively, 4.8% of Resource Capital 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.
Digital Realty Trust pays an annual dividend of $3.72 per share and has a dividend yield of 3.3%. Resource Capital pays an annual dividend of $0.20 per share and has a dividend yield of 2.1%. Digital Realty Trust pays out 302.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Resource Capital pays out 74.1% of its earnings in the form of a dividend. Digital Realty Trust has increased its dividend for 12 consecutive years and Resource Capital has increased its dividend for 2 consecutive years. Digital Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of current ratings for Digital Realty Trust and Resource Capital, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Digital Realty Trust||0||8||6||0||2.43|
Digital Realty Trust currently has a consensus price target of $124.69, suggesting a potential upside of 8.94%. Resource Capital has a consensus price target of $11.50, suggesting a potential upside of 19.54%. Given Resource Capital’s higher possible upside, analysts clearly believe Resource Capital is more favorable than Digital Realty Trust.
Digital Realty Trust beats Resource Capital on 11 of the 16 factors compared between the two stocks.
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.
Resource Capital Company Profile
Resource Capital Corp. is a real estate finance company. The Company operates through four segments: Commercial Real Estate Debt Investments, Commercial Finance, Residential Mortgage Lending and Corporate & Other. The Commercial Real Estate Debt Investments segment includes the Company’s activities and operations related to commercial real estate loans, commercial real estate-related securities and investments in real estate. The Commercial Finance segment includes the Company’s activities and operations related to syndicated corporate loans, syndicated corporate loan-related securities and direct financing leases. The Residential Mortgage Lending segment includes the Company’s activities and operations related to the investment in residential mortgage-backed securities (RMBS).
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