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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Digital Realty Trust, Inc. (XNYS:DLR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
DLR
Name:
DIGITAL REALTY TRUST, INC. (XNYS:DLR)
Sector:
277.69M
Industry:
REIT�Office
CEO:
Mr. A. William Stein
Total Employees:
3,030
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 37.79% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF DIGITAL REALTY TRUST, INC.(DLR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND REIT�OFFICE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
118.28
One Month Price Target:
$118.51
Six Month Price Target :
$119.67
Likely Price in One Year's Time:
Ticker:
$121.06
Likely Trading Range Today Under (Normal Volatility)
$117.89
Price Upper limit ($) :
$118.73
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$113.2
This week:
$106.92
This month :
$95.55
Other Primary facts
Market Cap:
34.29B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
287.41M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
11.66%
-10.97%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$141.87
$131.08
$94.69
$105.48
Medium risk (<10%) entry points
Buy Call
Sell Call
$127.57
Buy Put:
Sell Put:
$125.27
$108.96
$111.29
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
DLR
Sharpe Ratio:
0.70%
Comparison:
DLR, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -130.45% lower than the industry
& is -69.15% lower than the market/S&P 500 average
Average Returns/Yield of
DLR
Daily returns:
0.02%
Weekly returns:
0.12%
Monthly returns:
0.47%
Yearly returns:
-13.59%
Comparison of returns:
Average annual returns/yield (last 3 years) is -141.75% below industry average
Classification:
DLR, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.26
Statistical test of Returns:
DLR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.10%
Weekly Volatility:
4.70%
Monthly Volatility:
9.41%
Yearly Volatility:
32.59%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.38%
Volatility in last five trading days has been -34.55% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.30%
Weekly VaR:
-9.61%
Monthly VaR:
-19.21%
How Much Can the price of
DLR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-66.56%
This translates to price declining to:
$98.50
This translates to price declining to:
$39.55
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
DLR is a 35.61% riskier investment compared to the market/S&P 500 & is 16.18% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -23.73% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
DLR
Beta in relation to market/S&P 500--0.35
Expected beta in 1 year's time:
0.477
Expected beta in 3 year's time:
0.675
Unlevered (debt free) Beta:
0.194
Beta in relation to Nasdaq (XNAS):
0.605
Beta in relation to all global stocks::
0.634
Beta Comparison & Analysis
Beta of competitors/peers::
1.14
Beta is -69.35% lower than peers
Average Industry Beta:
0.988
Beta is -64.66% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.001
Alpha is -100.56% below industry average alpha yield
Alpha is 8% compared to market & is healthy
Analysis of Cost of Capital of
DLR
Equity cost of capital:
0.055
Equity cost of capital is -44.12% below industry mean WACC
Unlevered (without debt) cost of capital:
3.08%
Before-tax cost of debt:
1.82%
After-tax cost of debt:
1.44%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.44%
WACC is -54.33% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$15.53
Revenue growth rate per share of (3Y):
1.86
Annual revenue growth rate is -284.79% below industry average
EPS:
$4.82
Expected Annual growth rate of EPS (3Y):
35.84%
Expected future EPS growth rate is 208.97% higher than the REIT�Office industry
Free cash flow (FCF) per share:
$5.74
Balance sheet equity growth per share: 7.84%
Equity growth rate per share is -183.06% lower than the industry
Debt per share
$51.90
EBITDA per share
$11.35
Valuation Analysis Today of
DLR
P/E Ratio:
25.92
P/E Ratio of Competitors/Peers:
46.75
P/E ratio is -44.54% lower than main peers & is -57.95% lower than the industry
Stock price/value with industry average P/E ratio: $297.18
DLR is -60.20% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $148.87
Present value of the expected future dividends only: $112.00
P/S (Price to Sales ratio):
7.61
Price to sales ratio is 16.75% above the industry mean
P/B (Price to book value ratio):
1.86
Price to free cash flow: 20.60
-
Net income growth rate (3Y):
275.53%
Net income growth rate is 447.59% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 50.47%
Dividend yeild: 4.02%
Previous Dividend: $1.22
Previous adjusted dividend: $1.22
Previous Dividend: $4.76
Expected next dividend best case: $1.26
Expected next dividend worst case: $1.18
Average dividend payment (long-term): $1.15
Average dividend increase/decrease (growth rate) % per period: 1.24%
Expected next dividend payment date: 28/09/2022
Expected next dividend record date: 13/09/2022
-
Previous dividend payment date: 30/06/2022
Previous dividend record date: 15/06/2022
-
Dividend History:
2022-06-14--$1.22
2021-12-14--$1.16
2021-06-14--$1.16
2022-03-14--$1.22
2021-09-14--$1.16
2021-03-12--$1.16
Dividend growth rate is -110.79% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
84.29%
Net debt to equity ratio:
88.73%
Debt to assets ratio:
40.67%
Net debt to assets ratio:
42.81%
Debt-to-asset ratio is -117.83% below industry average
Ability to repay debt:
Interest coverage ratio:
11.28
Interest coverage ratio is -398.03% less than industry average
Looking forward:
Debt growth rate:
12.44%
Annual debt growth is -369% lower than industry average debt growth rate
Debt repayment rate in last quarter: 2.93%
Analysis of Key Statistics
Correlation of price movement with the market:
0.579
Statistical significance of correlation:
DLR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.626
Stock price is -7.56% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.626
Correlation of price movement with Nasdaq (^IXIC):
-0.007
Covariance of price movement with the market:
-0.009
Kurtosis
6.147
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.151
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
DLR
Gross Profit Margin Ratio:
235%
Operating Profit Margin Ratio:
14.71%
Operating profit margin is -25.79% lower than the industry
Net Profit Margin Ratio:
235%
Effective Tax Rate:
5.20%
Effective tax rate is -6.05% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
7.89%
Return on equity (ROE) is 80.02% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.81%
Return on assets (ROA) is 37.79% higher than the industry
Financial Leverage:
1.7x
Current Ratio:
0.37
Current ratio is -118.99% below industry average
Cash Conversion Cycle (days):
55.4
Cash conversion cycle is 70.49% above industry average
The remaining useful life of property plant & equipment is: 5.1 years
Stock based compensation to net income ratio:
1.33%
In-depth Efficiency Analysis
Revenue generated per employee:
1.5M
Each employee generates -36% less revenue than industry average revenue per employee
EBITDA generated per employee:
1.1M
Each employee generates -37% less EBITDA than industry average revenue per employee
Profit generated per employee:
460.9K
Each employee generates -29% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
91.6K
Each employee generates 133% more free cash flow than industry average revenue per employee
Assets/Capital per employee
11.8M
Each employee generates 133% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
DLR
REALTY INCOME CORPORATION (XNYS:O)
SIMON PROPERTY GROUP, INC. (XNYS:SPG)
WELLTOWER INC. (XNYS:WELL)
AVALONBAY COMMUNITIES, INC. (XNYS:AVB)
EQUITY RESIDENTIAL (XNYS:EQR)
ALEXANDRIA REAL ESTATE EQUITIES, INC. (XNYS:ARE)
SPG-PJ
WEYERHAEUSER COMPANY (XNYS:WY)
RITHM CAPITAL CORP. (XNYS:RITM)
Current Analyst Ratings
Strong buy�4%
Buy�25%
Hold�42%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
4.46B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
1.84B
2.62B
-
403.30M
403.30M
-
1.51B
1.91B
13.18M
289.27M
1.50B
3.26B
656.77M
1.40B
1.51B
78.50M
1.40B
Statement of Cash Flow
Date:
Period:
382.13M
Differed Income Tax :
-
Stock Based Compensation :
18.55M
Change in Working Capital :
- 199902.00K
Accounts Receivables:
- 168789.00K
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
277.69M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
157.96M
20.93B
21.09B
774.58M
-
- 20932965.00K
932.54M
1.36B
7.80B
2.64B
2.04B
-
21.90B
35.75B
71.50B
36.68B
1.57B
943.33M
-
-
-
2.52B
14.92B
346.91M
15.91B
-
18.43B
2.82M
- 3916854.00K
- 188844.0K
21.07B
March 31, 2022 at 6:00:00 AM
3.76B
17.70B
36.13B
22.98B
15.86B
15.7B
-
- 719092.00K
- 719092.00K
- 450000.00K
-
-
- 704911.00K
1.63B
478.30M
- 20035.00K
16.85M
168.34M
151.49M
277.69M
-
277.69M
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
DLR
2023
2024
2025
2026
2027
$121.67
$199.18
$203.85
$208.64
$213.53