Contrasting Digital Realty Trust (NYSE:DLR) & W.P. Carey (NYSE:WPC)

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

Dividends

W.P. Carey pays an annual dividend of $3.68 per share and has a dividend yield of 5.0%. Digital Realty Trust pays an annual dividend of $4.88 per share and has a dividend yield of 2.7%. W.P. Carey pays out 174.4% 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 135.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W.P. Carey has raised its dividend for 2 consecutive years. W.P. Carey is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

W.P. Carey has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500. Comparatively, Digital Realty Trust has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for W.P. Carey and Digital Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
W.P. Carey	1	7	2	0	2.10
Digital Realty Trust	0	8	16	2	2.77

W.P. Carey presently has a consensus price target of $70.00, suggesting a potential downside of 4.65%. Digital Realty Trust has a consensus price target of $192.33, suggesting a potential upside of 7.94%. Given Digital Realty Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Digital Realty Trust is more favorable than W.P. Carey.

Earnings & Valuation

This table compares W.P. Carey and Digital Realty Trust”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
W.P. Carey	$1.72 billion	9.37	$466.36 million	$2.11	34.79
Digital Realty Trust	$6.11 billion	10.02	$1.31 billion	$3.60	49.50

Digital Realty Trust has higher revenue and earnings than W.P. Carey. W.P. Carey 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.

Profitability

This table compares W.P. Carey and Digital Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
W.P. Carey	27.17%	5.67%	2.62%
Digital Realty Trust	21.41%	5.88%	2.73%

Institutional & Insider Ownership

73.7% of W.P. Carey shares are owned by institutional investors. Comparatively, 99.7% of Digital Realty Trust shares are owned by institutional investors. 0.9% of W.P. Carey shares are owned by insiders. Comparatively, 0.2% of Digital Realty Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Digital Realty Trust beats W.P. Carey on 14 of the 18 factors compared between the two stocks.

About W.P. Carey

W. P. Carey ranks among the largest net lease REITs with a well-diversified portfolio of high-quality, operationally critical commercial real estate, which includes 1,424 net lease properties covering approximately 173 million square feet and a portfolio of 89 self-storage operating properties as of December 31, 2023. With offices in New York, London, Amsterdam and Dallas, the company remains focused on investing primarily in single-tenant, industrial, warehouse and retail properties located in the U.S. and Northern and Western Europe, under long-term net leases with built-in rent escalations.

About Digital Realty Trust

Digital Realty Trust, Inc. operates as a real estate investment trust, which engages in the provision of data center, colocation and interconnection solutions. It serves the following industries: artificial intelligence (AI), networks, cloud, digital media, mobile, financial services, healthcare, and gaming. The company was founded on March 9, 2004, and is headquartered in Dallas, TX.