Dupont Fabros Technology (NYSE: DFT) and Realty Income Corporation (NYSE:O) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, earnings, risk and institutional ownership.

Risk and Volatility

Dupont Fabros Technology has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, Realty Income Corporation has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500.

Profitability

This table compares Dupont Fabros Technology and Realty Income Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dupont Fabros Technology 26.05% 19.58% 4.64%
Realty Income Corporation 29.19% 5.14% 2.62%

Analyst Ratings

This is a summary of recent recommendations and price targets for Dupont Fabros Technology and Realty Income Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dupont Fabros Technology 0 9 4 0 2.31
Realty Income Corporation 2 4 3 0 2.11

Dupont Fabros Technology presently has a consensus target price of $60.15, suggesting a potential downside of 9.29%. Realty Income Corporation has a consensus target price of $66.00, suggesting a potential upside of 10.18%. Given Realty Income Corporation’s higher probable upside, analysts plainly believe Realty Income Corporation is more favorable than Dupont Fabros Technology.

Valuation & Earnings

This table compares Dupont Fabros Technology and Realty Income Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dupont Fabros Technology $543.97 million 9.45 $333.04 million $1.64 40.43
Realty Income Corporation $1.16 billion 14.15 $1.05 billion $1.17 51.20

Realty Income Corporation has higher revenue and earnings than Dupont Fabros Technology. Dupont Fabros Technology is trading at a lower price-to-earnings ratio than Realty Income Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

69.2% of Realty Income Corporation shares are held by institutional investors. 5.6% of Dupont Fabros Technology shares are held by company insiders. Comparatively, 0.3% of Realty Income Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Dupont Fabros Technology pays an annual dividend of $2.00 per share and has a dividend yield of 3.0%. Realty Income Corporation pays an annual dividend of $2.54 per share and has a dividend yield of 4.2%. Dupont Fabros Technology pays out 122.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Realty Income Corporation pays out 217.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dupont Fabros Technology has raised its dividend for 21 consecutive years and Realty Income Corporation has raised its dividend for 5 consecutive years.

Summary

Dupont Fabros Technology beats Realty Income Corporation on 9 of the 17 factors compared between the two stocks.

Dupont Fabros Technology Company Profile

DuPont Fabros Technology, Inc. (DFT) is a real estate investment trust (REIT). The Company owns, acquires, develops and operates wholesale data centers. The Company’s customers include national and international enterprises across various industries, such as technology, Internet, content providers, cloud providers, media, communications, healthcare and financial services. Its data centers are located in four population centers: Northern Virginia; suburban Chicago, Illinois; Piscataway, New Jersey, and Santa Clara, California. As of December 31, 2016, the Company owned various properties, including 11 operating data centers facilities; five phases of existing data center facilities under development; one shell of a data center under development; two data center facilities with a phase or phases available for development, and parcels of land held for development of four data centers. As of December 31, 2016, the Company’s 11 data centers had a total of 3.3 million gross square feet.

Realty Income Corporation Company Profile

Realty Income Corporation is a real estate investment trust (REIT). The Company is engaged in in-house acquisition, portfolio management, asset management, credit research, real estate research, legal, finance and accounting, information technology and capital markets capabilities. As of December 31, 2016, the Company owned a diversified portfolio of 4,944 properties located in 49 states and Puerto Rico, with over 83.0 million square feet of leasable space leased to 248 different commercial tenants doing business in 47 separate industries. As of December 31, 2016, of the 4,944 properties in the portfolio, 4,920, or 99.5%, were single-tenant properties, and the remaining were multi-tenant properties. As of December 31, 2016, of the 4,920 single-tenant properties, 4,836 were leased with a weighted average remaining lease term (excluding rights to extend a lease at the option of the tenant) of approximately 9.8 years.

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