Financial Survey: Digital Realty Trust (NYSE:DLR) vs. Crown Castle (NYSE:CCI)

Crown Castle (NYSE:CCI) and Digital Realty Trust (NYSE:DLR) are both large-cap real estate companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Crown Castle and Digital Realty Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crown Castle	0	12	7	2	2.52
Digital Realty Trust	0	6	25	1	2.84

Crown Castle currently has a consensus price target of $95.13, suggesting a potential upside of 25.35%. Digital Realty Trust has a consensus price target of $219.45, suggesting a potential upside of 15.46%. Given Crown Castle’s higher possible upside, research analysts plainly believe Crown Castle is more favorable than Digital Realty Trust.

Dividends

Crown Castle pays an annual dividend of $4.25 per share and has a dividend yield of 5.6%. Digital Realty Trust pays an annual dividend of $4.88 per share and has a dividend yield of 2.6%. Crown Castle pays out 215.7% 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. Crown Castle is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Crown Castle and Digital Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Crown Castle	20.71%	-51.60%	3.70%
Digital Realty Trust	11.80%	3.34%	1.59%

Volatility and Risk

Crown Castle has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Digital Realty Trust has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Earnings and Valuation

This table compares Crown Castle and Digital Realty Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Crown Castle	$4.26 billion	7.57	$444.00 million	$1.97	38.52
Digital Realty Trust	$6.77 billion	10.41	$1.31 billion	$2.06	92.27

Digital Realty Trust has higher revenue and earnings than Crown Castle. Crown Castle 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.

Institutional & Insider Ownership

90.8% of Crown Castle shares are held by institutional investors. Comparatively, 99.7% of Digital Realty Trust shares are held by institutional investors. 0.1% of Crown Castle shares are held by insiders. Comparatively, 0.2% of Digital Realty Trust shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Digital Realty Trust beats Crown Castle on 11 of the 17 factors compared between the two stocks.

About Crown Castle

Crown Castle owns, operates and leases more than 40,000 cell towers and approximately 90,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market. This nationwide portfolio of communications infrastructure connects cities and communities to essential data, technology and wireless service – bringing information, ideas and innovations to the people and businesses that need them.

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.