Daily Stock Opinions and Ratings

Opinions

Jim Cramer - Mad MoneyDigital Realty TrustDLRBUYMay 16, 2022

AHY: Accidental high-yielding stocks that have fallen so far that their dividends now pay huge. A REIT that runs data centres. Usually pricey, now is the time to buy on weakness. Shares have fallen from $178 to $128 today. Pays a 3.8% dividend and could go higher. The data centre buiness isn't vanishing anytime.

Jim Cramer - Mad Money

Owned

Unlock Rating

$128.41

Stock price when the opinion was issued

$187.60

As of Jun 18, 2026. Market Open.

Financial Services

It's the ideal tool to help you make quicker, more informed decisions for managing and tracking your investments.

Get Signals Create your Watchlist

You might be interested:

BUY

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

DLR is a fundamentally strong REIT, with expanding net profit margins and ROE, and it generates good free cash flows. Its yield is attractive, although its Funds From Operations (FFO) to debt have been declining over the past few years, indicating its debt levels have increased at a faster rate than FFO. It trades at a high valuation, but this can be justified given its strong fundamentals. Given a potential peak in interest rates, the underlying secular trend growth in the data center industry, and its strong fundamentals, we would be comfortable holding or adding slowly to this name.
Unlock Premium - Try 5i Free

PARTIAL BUY

Buy in tranches with each increase of 0.25% in interest rates. Likes DLR.

WATCH

The chart shows a nice uptrend since late May, and coming after a 2-year downtrend before peaking at $180. It's a recovery story. Is there enough interest for this to break above $120 to $140? Watch weekly closes, rather than daily closes, because there are five data points in a week.

HOLD

Smallest position in his fund. Prefers EQIX and SWCH, as these are more defensible businesses with better pricing power. Likes the space, selloff has been overdone. See his Top Picks.

COMMENT

Which of the two is better. They are in the digital realty space. DLR is difficult to grow because of the size. Of the two he would prefer SWCH.

HOLD

Big Daddy in data centre space. Sector benefits from online and mobile device activity. Great sector. Synergy for seeing data centres at the foot of the data towers, and over the next 5 years, you should see this convergence. A lot of the growth is already built in.

BUY

For a retirement fund This is the best data centre stock.

HOLD

Focus on data centres in key markets globally. Secular themes that work, with data consumption and the cloud. Supply has been an issue, but now more balanced. Trades at a nice premium, whereas he's always trying to find discounts. Long-term secular growth. Trim on strength.

PAST TOP PICK

(A Top Pick Dec 06/19, Up 22%) Carrier-neutral data centre. Now prefers Equinix. 12-month price target of $165.50, so there's still some runway.

PAST TOP PICK

(A Top Pick Dec 06/19, Up 22%) Data centre REIT. A bit different, because they actually own their sites. Interest rate sensitive, so it's been held back. Just bought a complementary Netherlands company. Bullish on it. His price target is $US165. Yield is 3%.

PAST TOP PICK

(A Top Pick Dec 06/19, Up 21%) Price target of $165. Carrier-neutral data centre. Smart acquisitions. Not a bad buy here. Yield is 3%.

DON'T BUY

Equinix vs. Digital Realty They're both the largest US data centres. Equinix focuses on interconnection and co-location, housing thousands of businesses within the same business centre. Digital Realty focuses on hyperscale, which provides buildings and server racks for megacaps like Google. The latter business has fewer barriers to entry and is far more competitive with less pricing power. He prefers Equinix's model.

COMMENT

He does not own DLR presently, but has in the past. They are involved in the data centre business. He currently owns EQIX, who partnered with BCE to manage their data centres. If you own DLR, stick with it. If you are looking at getting into the space, consider EQIX.

Premium content

It's a Monthly Gems opinion which is available only for Stockchase Premium

Curated by Allan Tong since 2019.
99+ opinions with 4.15 rating.

TOP PICK

Staying on the tech theme is this REIT which holds data centres in a dozen countries, including the U.S., South Korea, and most recently Hong Kong. Clients include Facebook. It's no secret that cloud computing is booming, encouraged by the current work-at-home trend, and Digital Realty is in the perfect place to capitalize. Analysts don't talk about DLR much, but its steady performance and growth outlook warrant attention. True, DLR lags the powerful Nasdaq 14% to 24%, but it blows past the S&P and Dow. It pays a steady 3% dividend yield and is trading comfortably above its 50- and 200-day moving averages. DLR offers a one-year return of 24.5% with YOY revenue growth of 5.34% and an 18% profit margin. It currently trades at its price target, and keeps bubbling under its 52-week high of $158. DLR is less of a trading stock than AMT, but serves better as a long-term hold.

Wealthica The ultimate 360° Tracker Your financial life in one place, automatically

Most Recent Experts

Stockchase Insights

5i Research

Brian Acker, CA

Acker Finley Inc.

The Weekly Buzzing Stocks by Billy Kawasaki

Stockchase

David Burrows

Barometer Capital Management