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How Does Digital Realty Compare to Its Peers?

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Oct. 30 2015, Published 8:05 a.m. ET

Digital Realty and its peers

In this article, we’ll compare Digital Realty with its peers on several key measures:

  • The PE (price-to-earnings) ratios of Digital Realty (DLR), CenturyLink (CTL), DuPont Fabros Technology (DFT), and CoreSite Realty Corporation (COR) are 35.4x, 22.3x, 28.5x, and 70.4x, respectively.
  • The PBV (price-to-book value) ratios of Digital Realty, CenturyLink, Brandywine Realty Trust (BDN), DuPont Fabros Technology, and CoreSite Realty Corporation are 3.5x, 1.1x, 1.2x, 2.7x, and 5.2x, respectively.

  • The price-to-sales ratios of Digital Realty, CenturyLink, Brandywine Realty Trust, DuPont Fabros Technology, and CoreSite Realty Corporation are 5.9x, 0.89x, 4.2x, 5.8x, and 8.7x, respectively.

Thus, Digital Realty has outperformed its peers on all three measures.

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ETFs that invest in Digital Realty

The iShares Cohen & Steers Realty Majors ETF (ICF) invests 2.4% of its holdings in Digital Realty. The ETF tracks an index of 30 large-cap REITs.

The Schwab US REIT ETF (SCHH) invests 1.6% of its holdings in Digital Realty. The ETF tracks a market cap–weighted index of REITs, excluding mortgage REITs and firms involved in real estate finance.

The iShares FTSE NAREIT Real Estate 50 ETF (FTY) invests 1.6% of its holdings in Digital Realty. The ETF tracks a market cap–weighted index of the 50 largest companies in the US real estate sector.

Comparing Digital Realty and its ETFs

Now let’s compare Digital Realty with the ETFs that invest in it:

  • The YTD (year-to-date) price movements of Digital Realty, ICF, SCHH, and FTY are 12.8%, 4.1%, 3.8%, and 2.3%, respectively.
  • The PE ratios of Digital Realty, ICF, SCHH, and FTY are 35.4x, 36.4x, 36.9x, and 39.4x, respectively.
  • The PBV ratios of Digital Realty, ICF, SCHH, and FTY are 3.5x, 2.5x, 2.4x, and 2.4x, respectively.

According to the above findings, ETFs are way ahead of Digital Realty based on PE ratio. However, Digital Realty has outperformed its ETFs based on price movement and PBV ratio.

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