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

Institutional & Insider Ownership

85.1% of EPR Properties shares are held by institutional investors. 0.4% of Digital Realty Trust shares are held by insiders. Comparatively, 1.5% of EPR Properties shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Digital Realty Trust 21.27% 12.39% 4.15%
EPR Properties 46.90% 10.51% 4.89%

Risk and Volatility

Digital Realty Trust has a beta of 0.01, indicating that its share price is 99% less volatile than the S&P 500. Comparatively, EPR Properties has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Digital Realty Trust $2.26 billion 8.40 $1.22 billion $2.51 46.63
EPR Properties $526.01 million 9.90 $461.10 million $3.40 20.79

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

Dividends

Digital Realty Trust pays an annual dividend of $3.72 per share and has a dividend yield of 3.2%. EPR Properties pays an annual dividend of $4.08 per share and has a dividend yield of 5.8%. 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. EPR Properties pays out 120.0% 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 12 consecutive years and EPR Properties has increased its dividend for 6 consecutive years. EPR Properties is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent recommendations for Digital Realty Trust and EPR Properties, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digital Realty Trust 0 8 6 0 2.43
EPR Properties 0 2 2 0 2.50

Digital Realty Trust presently has a consensus price target of $120.58, suggesting a potential upside of 3.02%. EPR Properties has a consensus price target of $78.80, suggesting a potential upside of 11.49%. Given EPR Properties’ stronger consensus rating and higher possible upside, analysts clearly believe EPR Properties is more favorable than Digital Realty Trust.

Summary

EPR Properties beats Digital Realty Trust on 11 of the 17 factors compared between the two stocks.

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.

About EPR Properties

EPR Properties is a specialty real estate investment trust. The Company’s investment portfolio includes primarily entertainment, education and recreation properties. The Company’s segments include Entertainment, Education, Recreation and Other. The Entertainment segment consists of investments in megaplex theatres, entertainment retail centers, family entertainment centers and other retail parcels. The Education segment consists of investments in public charter schools, early education centers and K-12 private schools. The Recreation segment consists of investments in ski areas, waterparks, golf entertainment complexes and other recreation. The Other segment consists primarily of land under ground lease, property under development and land held for development. As of December 31, 2016, the Company’s owned real estate portfolio of megaplex theatres consisted of approximately 10.6 million square feet.

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