Digital Realty Trust (DLR) & PS Business Parks (PSB) Financial Comparison
PS Business Parks (NYSE: PSB) and Digital Realty Trust (NYSE:DLR) are both mid-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.
PS Business Parks pays an annual dividend of $3.40 per share and has a dividend yield of 2.5%. Digital Realty Trust pays an annual dividend of $3.72 per share and has a dividend yield of 3.1%. PS Business Parks pays out 111.1% 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. PS Business Parks has increased its dividend for 12 consecutive years and Digital Realty Trust has increased its dividend for 3 consecutive years.
This table compares PS Business Parks and Digital Realty Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|PS Business Parks||39.05%||16.50%||7.61%|
|Digital Realty Trust||21.27%||12.39%||4.15%|
Valuation and Earnings
This table compares PS Business Parks and Digital Realty Trust’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|PS Business Parks||$394.93 million||9.20||$261.16 million||$3.06||43.63|
|Digital Realty Trust||$2.26 billion||8.49||$1.22 billion||$2.51||47.14|
Digital Realty Trust has higher revenue and earnings than PS Business Parks. PS Business Parks 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.
Insider & Institutional Ownership
72.3% of PS Business Parks shares are held by institutional investors. 1.6% of PS Business Parks shares are held by company insiders. Comparatively, 0.4% of Digital Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This is a breakdown of current ratings and price targets for PS Business Parks and Digital Realty Trust, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|PS Business Parks||1||1||0||0||1.50|
|Digital Realty Trust||0||8||6||0||2.43|
PS Business Parks presently has a consensus price target of $107.00, suggesting a potential downside of 19.85%. Digital Realty Trust has a consensus price target of $120.08, suggesting a potential upside of 1.48%. Given Digital Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Digital Realty Trust is more favorable than PS Business Parks.
Risk and Volatility
PS Business Parks has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Digital Realty Trust has a beta of 0.01, meaning that its share price is 99% less volatile than the S&P 500.
PS Business Parks beats Digital Realty Trust on 11 of the 17 factors compared between the two stocks.
PS Business Parks Company Profile
PS Business Parks, Inc. is a self-advised and self-managed real estate investment trust (REIT). The Company owns, operates and develops commercial properties, primarily multi-tenant flex, office and industrial parks. It focuses on owning concentrated business parks. PS Business Parks, L.P. (the Operating Partnership) is a California limited partnership, which owns directly or indirectly substantially all of its assets and through, which the Company conducts substantially all of its business. PSB is the partner of the Operating Partnership and, as of December 31, 2016, owned 77.9% of the common partnership units. The remaining common partnership units are owned by Public Storage (PS). As of December 31, 2016, the Company owned and operated 28.1 million rentable square feet of commercial space, comprising 99 business parks, in the states, including California, Texas, Virginia, Florida, Maryland and Washington. It also manages 684,000 rentable square feet on behalf of PS.
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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