Analyzing Four Corners Property Trust (NYSE:FCPT) and Digital Realty Trust (NYSE:DLR)

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Four Corners Property Trust and Digital Realty Trust, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Four Corners Property Trust	0	5	5	0	2.50
Digital Realty Trust	0	6	25	1	2.84

Four Corners Property Trust currently has a consensus price target of $27.80, suggesting a potential upside of 9.92%. Digital Realty Trust has a consensus price target of $219.45, suggesting a potential upside of 18.46%. Given Digital Realty Trust’s stronger consensus rating and higher probable upside, analysts clearly believe Digital Realty Trust is more favorable than Four Corners Property Trust.

Earnings and Valuation

This table compares Four Corners Property Trust 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
Four Corners Property Trust	$306.40 million	9.06	$112.36 million	$1.11	22.78
Digital Realty Trust	$6.77 billion	10.15	$1.31 billion	$2.06	89.93

Digital Realty Trust has higher revenue and earnings than Four Corners Property Trust. Four Corners Property Trust 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 Four Corners Property Trust and Digital Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Four Corners Property Trust	38.70%	7.35%	4.05%
Digital Realty Trust	11.80%	3.34%	1.59%

Volatility and Risk

Four Corners Property Trust has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Digital Realty Trust has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500.

Insider and Institutional Ownership

98.7% of Four Corners Property Trust shares are owned by institutional investors. Comparatively, 99.7% of Digital Realty Trust shares are owned by institutional investors. 1.2% of Four Corners Property Trust shares are owned by company insiders. Comparatively, 0.2% of Digital Realty Trust shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Four Corners Property Trust pays an annual dividend of $1.46 per share and has a dividend yield of 5.8%. Digital Realty Trust pays an annual dividend of $4.88 per share and has a dividend yield of 2.6%. Four Corners Property Trust pays out 131.5% 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 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. Four Corners Property Trust has raised its dividend for 5 consecutive years. Four Corners Property Trust is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Digital Realty Trust beats Four Corners Property Trust on 11 of the 18 factors compared between the two stocks.

About Four Corners Property Trust

Four Corners Property Trust, Inc. engages in the owning, acquisition, and leasing of properties for use in the restaurant and food-service related industries. It operates through the Real Estate Operations and Restaurant Operations segments. The Real Estate Operations segment consists of rental revenues generated by leasing restaurant properties. The Restaurant Operations segment includes the Kerrow Restaurant operating business. The company was founded on July 2, 2015 and is headquartered in Mill Valley, CA.

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.