June 29, 2023
Top 10 Stock Digital Realty Trust Sell Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Digital Realty Trust – Top 10 Stock in Real Estate in the United States
Digital Realty Trust is listed as a top 10 stock on June 29, 2023 in the market index R/E USA because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 18 (18% performer), Obermatt issues an overall sell recommendation for Digital Realty Trust on June 29, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | REITs: Specialized |
| Index | Energy Efficient, Renewables Users, R/E USA, S&P 500 |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Digital Realty Trust Sell
| 360 METRICS | June 29, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 35 |
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| SAFETY | ||||||||
| SAFETY | 65 |
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| SENTIMENT | ||||||||
| SENTIMENT | 18 |
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| 360° VIEW | ||||||||
| 360° VIEW | 18 |
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ANALYSIS: With an Obermatt 360° View of 18 (better than 18% compared with alternatives), overall professional sentiment and financial characteristics for the stock Digital Realty Trust are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Digital Realty Trust. The only rank that is above average is the consolidated Safety Rank at 65, which means that the company has a financing structure that is safer than those of 65% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 41, which means that the share price of Digital Realty Trust is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 35, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 18, which means that professional investors are more pessimistic about the stock than for 82% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a consolidated 360° View of 18, Digital Realty Trust is worse than 82% of all alternative stock investment opportunities based on the Obermatt Method. This means that Digital Realty Trust shares are on the riskier side for investors. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 18. The negative market view on Digital Realty Trust may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Digital Realty Trust negative
ANALYSIS: With an Obermatt Sentiment Rank of 18 (better than 18% compared with alternatives), overall professional sentiment and engagement for the stock Digital Realty Trust is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for Digital Realty Trust. Analyst Opinions are at a rank of 38 (worse than 62% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 45, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 8, which means that professional investors hold less stock in this company than in 92% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Digital Realty Trust is Market Pulse, with a rank of 59, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 59% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 18 (less encouraging than 82% compared with investment alternatives), Digital Realty Trust has a reputation among professional investors that is far below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Digital Realty Trust Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), Digital Realty Trust shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Digital Realty Trust. Price-to-Sales (P/S) is 53, which means that the stock price compared with what market professionals expect for future sales is lower than for 53% of comparable companies, indicating a good value concerning Digital Realty Trust's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 59, which means that dividends are expected to be higher than for 59% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 65% of alternatives (only 35% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 99% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on Digital Realty Trust's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: Digital Realty Trust Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 35 (better than 35% compared with alternatives), Digital Realty Trust shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Digital Realty Trust. Only Capital Growth has a good rank of 79, which means that currently professionals expect the company to grow its invested capital more than 34% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 49 which means that currently professionals expect the company to grow less than 51% of its competitors. Profit Growth with a rank of 34 and Stock Returns with a rank of 19 are also low (below 81% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 35, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Digital Realty Trust is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Digital Realty Trust Debt Financing Safety above-average
| SAFETY METRICS | June 29, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 52 |
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| REFINANCING | ||||||||
| REFINANCING | 17 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 24 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 65 |
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ANALYSIS: With an Obermatt Safety Rank of 65 (better than 65% compared with alternatives), the company Digital Realty Trust has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Digital Realty Trust is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Digital Realty Trust and the other two below average. Leverage is at a rank of 52 meaning the company has a below-average debt-to-equity ratio. It has less debt than 52% of its competitors.Refinancing is at a rank of 17, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 83% of its competitors. Liquidity is at a rank of 24, meaning that the company generates less profit to service its debt than 76% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 65 (better than 65% compared with alternatives), Digital Realty Trust has a financing structure that is safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Digital Realty Trust are on the safer side. ...read more
Combined financial peformance: Digital Realty Trust Above-Average Financial Performance
| COMBINED PERFORMANCE | June 29, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 35 |
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| SAFETY | ||||||||
| SAFETY | 24 |
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| COMBINED | ||||||||
| COMBINED | 69 |
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ANALYSIS: With an Obermatt Combined Rank of 69 (better than 69% compared with investment alternatives), Digital Realty Trust (REITs: Specialized, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Digital Realty Trust are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives) and show below-average growth (Growth Rank of 35) but are safely financed (Safety Rank of 65), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 69, is a buy recommendation based on Digital Realty Trust's financial characteristics. As the company Digital Realty Trust's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 41) and low growth (Obermatt Growth Rank of 35), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 65) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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