Digital Realty Trust (DLR) vs. Boston Properties (BXP) Financial Comparison

Boston Properties (NYSE: BXP) and Digital Realty Trust (NYSE:DLR) are both large-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
Boston Properties 17.67% 5.86% 2.39%
Digital Realty Trust 10.10% 4.03% 1.67%

Dividends

Boston Properties pays an annual dividend of $3.20 per share and has a dividend yield of 2.5%. Digital Realty Trust pays an annual dividend of $4.04 per share and has a dividend yield of 3.8%. Boston Properties pays out 109.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Digital Realty Trust pays out 400.0% 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 has increased its dividend for 13 consecutive years. Digital Realty Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

95.3% of Boston Properties shares are held by institutional investors. Comparatively, 100.0% of Digital Realty Trust shares are held by institutional investors. 6.2% of Boston Properties shares are held by insiders. Comparatively, 0.4% of Digital Realty Trust shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Boston Properties has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Digital Realty Trust has a beta of 0.01, suggesting that its share price is 99% less volatile than the S&P 500.

Earnings & Valuation

This table compares Boston Properties and Digital Realty Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Boston Properties $2.60 billion 7.54 $462.43 million $2.93 43.40
Digital Realty Trust $2.46 billion 8.89 $248.25 million $1.01 105.32

Boston Properties has higher revenue and earnings than Digital Realty Trust. Boston Properties 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.

Analyst Ratings

This is a summary of recent recommendations for Boston Properties and Digital Realty Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Boston Properties 0 8 6 0 2.43
Digital Realty Trust 0 5 11 0 2.69

Boston Properties currently has a consensus target price of $132.00, suggesting a potential upside of 3.81%. Digital Realty Trust has a consensus target price of $122.43, suggesting a potential upside of 15.10%. Given Digital Realty Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Digital Realty Trust is more favorable than Boston Properties.

Summary

Boston Properties beats Digital Realty Trust on 9 of the 17 factors compared between the two stocks.

About Boston Properties

Boston Properties, Inc. is a real estate investment trust. The Company is an owner and developer of office properties in the United States. Its segments by geographic area are Boston, New York, San Francisco and Washington, DC. Its segments by property type include Office, Residential and Hotel. As of December 31, 2016, the Company owned or had interests in 174 commercial real estate properties, aggregating approximately 47.7 million net rentable square feet of primarily Class A office properties, including eight properties under construction/redevelopment totaling approximately 4.0 million net rentable square feet. As of December 31, 2016, its properties consisted of 164 Office properties (including six properties under construction/redevelopment); one hotel; five retail properties, and four residential properties (including two under construction). Its tenant base includes sectors, such as media technology, legal services, government/public administration and retail.

About Digital Realty Trust

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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