Gladstone Land (NASDAQ:LAND) versus Digital Realty Trust (NYSE:DLR) Financial Analysis

Digital Realty Trust (NYSE:DLR) and Gladstone Land (NASDAQ:LAND) are both real estate companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Digital Realty Trust and Gladstone Land, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Digital Realty Trust	0	6	25	1	2.84
Gladstone Land	1	2	0	1	2.25

Digital Realty Trust currently has a consensus price target of $218.16, indicating a potential upside of 10.37%. Gladstone Land has a consensus price target of $10.00, indicating a potential upside of 20.55%. Given Gladstone Land’s higher probable upside, analysts clearly believe Gladstone Land is more favorable than Digital Realty Trust.

Dividends

Digital Realty Trust pays an annual dividend of $4.88 per share and has a dividend yield of 2.5%. Gladstone Land pays an annual dividend of $0.56 per share and has a dividend yield of 6.8%. Digital Realty Trust pays out 236.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gladstone Land pays out -101.8% of its earnings in the form of a dividend. Gladstone Land has increased its dividend for 2 consecutive years. Gladstone Land is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Digital Realty Trust and Gladstone Land”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Digital Realty Trust	$6.11 billion	11.97	$1.31 billion	$2.06	95.95
Gladstone Land	$88.48 million	4.04	$13.53 million	($0.55)	-15.08

Digital Realty Trust has higher revenue and earnings than Gladstone Land. Gladstone Land 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 Digital Realty Trust and Gladstone Land’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Digital Realty Trust	11.80%	3.34%	1.59%
Gladstone Land	-7.31%	-0.96%	-0.53%

Risk & Volatility

Digital Realty Trust has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, Gladstone Land has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.

Insider and Institutional Ownership

99.7% of Digital Realty Trust shares are held by institutional investors. Comparatively, 53.6% of Gladstone Land shares are held by institutional investors. 0.2% of Digital Realty Trust shares are held by insiders. Comparatively, 6.1% of Gladstone Land shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Digital Realty Trust beats Gladstone Land 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 Gladstone Land

Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. and leases its properties to unrelated third-party farmers. The Company, which reports the aggregate fair value of its farmland holdings on a quarterly basis, currently owns 169 farms, comprised of approximately 116,000 acres in 15 different states and over 45,000 acre-feet of banked water in California, valued at a total of approximately $1.6 billion. Gladstone Land’s farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The Company also owns farms growing permanent crops, such as almonds, apples, cherries, figs, lemons, olives, pistachios, and other orchards, as well as blueberry groves and vineyards, which are generally planted every 20-plus years and harvested annually. Approximately 40% of the Company’s fresh produce acreage is either organic or in transition to become organic, and over 10% of its permanent crop acreage falls into this category. The Company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. Gladstone Land pays monthly distributions to its stockholders and has paid 129 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The Company has increased its common distributions 32 times over the prior 35 quarters, and the current per-share distribution on its common stock is $0.0464 per month, or $0.5568 per year.