Analyzing Public Storage (NYSE:PSA) & Digital Realty Trust (NYSE:DLR)

Digital Realty Trust (NYSE:DLR) and Public Storage (NYSE:PSA) are both large-cap real estate companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Institutional & Insider Ownership

99.7% of Digital Realty Trust shares are owned by institutional investors. Comparatively, 78.8% of Public Storage shares are owned by institutional investors. 0.2% of Digital Realty Trust shares are owned by insiders. Comparatively, 11.1% of Public Storage shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Digital Realty Trust pays an annual dividend of $4.88 per share and has a dividend yield of 2.6%. Public Storage pays an annual dividend of $12.00 per share and has a dividend yield of 3.7%. Digital Realty Trust pays out 236.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Public Storage pays out 114.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Public Storage is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent recommendations for Digital Realty Trust and Public Storage, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Digital Realty Trust	0	6	25	1	2.84
Public Storage	0	14	7	0	2.33

Digital Realty Trust presently has a consensus target price of $219.45, indicating a potential upside of 16.01%. Public Storage has a consensus target price of $326.16, indicating a potential upside of 0.33%. Given Digital Realty Trust’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Digital Realty Trust is more favorable than Public Storage.

Valuation and Earnings

This table compares Digital Realty Trust and Public Storage”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Digital Realty Trust	$6.11 billion	11.45	$1.31 billion	$2.06	91.83
Public Storage	$4.89 billion	11.67	$1.78 billion	$10.48	31.02

Public Storage has lower revenue, but higher earnings than Digital Realty Trust. Public Storage 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.

Volatility & Risk

Digital Realty Trust has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500. Comparatively, Public Storage has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500.

Profitability

This table compares Digital Realty Trust and Public Storage’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Digital Realty Trust	11.80%	3.34%	1.59%
Public Storage	41.80%	40.98%	10.19%

Summary

Public Storage beats Digital Realty Trust on 9 of the 17 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 Public Storage

Public Storage, a member of the S&P 500 and FT Global 500, is a REIT that primarily acquires, develops, owns, and operates self-storage facilities. At December 31, 2023, we had: (i) interests in 3,044 self-storage facilities located in 40 states with approximately 218 million net rentable square feet in the United States and (ii) a 35% common equity interest in Shurgard Self Storage Limited (Euronext Brussels: SHUR), which owned 275 self-storage facilities located in seven Western European nations with approximately 15 million net rentable square feet operated under the Shurgard brand. Our headquarters are located in Glendale, California.