Digital Realty Trust (NYSE:DLR – Get Free Report) and Apollo Commercial Real Estate Finance (NYSE:ARI – Get Free Report) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.
Analyst Ratings
This is a breakdown of current ratings and target prices for Digital Realty Trust and Apollo Commercial Real Estate Finance, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Digital Realty Trust | 1 | 5 | 17 | 2 | 2.80 |
| Apollo Commercial Real Estate Finance | 0 | 3 | 2 | 0 | 2.40 |
Digital Realty Trust currently has a consensus price target of $185.76, indicating a potential upside of 5.23%. Apollo Commercial Real Estate Finance has a consensus price target of $10.13, indicating a potential upside of 3.26%. Given Digital Realty Trust’s stronger consensus rating and higher possible upside, research analysts clearly believe Digital Realty Trust is more favorable than Apollo Commercial Real Estate Finance.
Volatility and Risk
Institutional & Insider Ownership
99.7% of Digital Realty Trust shares are held by institutional investors. Comparatively, 54.4% of Apollo Commercial Real Estate Finance shares are held by institutional investors. 0.1% of Digital Realty Trust shares are held by company insiders. Comparatively, 0.7% of Apollo Commercial Real Estate Finance shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Profitability
This table compares Digital Realty Trust and Apollo Commercial Real Estate Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Digital Realty Trust | 7.65% | 2.07% | 0.96% |
| Apollo Commercial Real Estate Finance | 3.77% | 8.89% | 1.90% |
Earnings and Valuation
This table compares Digital Realty Trust and Apollo Commercial Real Estate Finance”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Digital Realty Trust | $5.63 billion | 10.56 | $615.19 million | $1.07 | 164.98 |
| Apollo Commercial Real Estate Finance | $303.67 million | 4.49 | -$119.64 million | ($0.03) | -326.83 |
Digital Realty Trust has higher revenue and earnings than Apollo Commercial Real Estate Finance. Apollo Commercial Real Estate Finance 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 $4.88 per share and has a dividend yield of 2.8%. Apollo Commercial Real Estate Finance pays an annual dividend of $1.00 per share and has a dividend yield of 10.2%. Digital Realty Trust pays out 456.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apollo Commercial Real Estate Finance pays out -3,333.3% of its earnings in the form of a dividend. Apollo Commercial Real Estate Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Digital Realty Trust beats Apollo Commercial Real Estate Finance on 11 of the 17 factors compared between the two stocks.
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.
About Apollo Commercial Real Estate Finance
Apollo Commercial Real Estate Finance, Inc. operates as a real estate investment trust (REIT) that originates, acquires, invests in, and manages commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments in the United States, the United Kingdom, and Europe. It is qualified as a REIT under the Internal Revenue Code. As a REIT, it would not be subject to federal income taxes, if the company distributes at least 90% of its REIT taxable income to its stockholders. Apollo Commercial Real Estate Finance, Inc. was incorporated in 2009 and is based in New York, New York.
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