DuPont Fabros Technology (DFT) & NRF Holdco (NRF) Critical Survey

NRF Holdco (NYSE: NRF) and DuPont Fabros Technology (NYSE:DFT) are both mid-cap financials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Valuation & Earnings

This table compares NRF Holdco and DuPont Fabros Technology’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NRF Holdco N/A N/A N/A ($1.80) -8.96
DuPont Fabros Technology N/A N/A N/A $1.65 40.19

NRF Holdco is trading at a lower price-to-earnings ratio than DuPont Fabros Technology, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

NRF Holdco has a beta of 1.73, meaning that its stock price is 73% more volatile than the S&P 500. Comparatively, DuPont Fabros Technology has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500.

Dividends

NRF Holdco pays an annual dividend of $1.60 per share and has a dividend yield of 9.9%. DuPont Fabros Technology pays an annual dividend of $2.00 per share and has a dividend yield of 3.0%. NRF Holdco pays out -88.9% of its earnings in the form of a dividend. DuPont Fabros Technology pays out 121.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NRF Holdco has raised its dividend for 6 consecutive years. NRF Holdco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares NRF Holdco and DuPont Fabros Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NRF Holdco -16.61% -17.86% -2.44%
DuPont Fabros Technology 26.98% 17.13% 4.69%

Analyst Recommendations

This is a breakdown of current recommendations for NRF Holdco and DuPont Fabros Technology, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NRF Holdco 0 0 0 0 N/A
DuPont Fabros Technology 0 8 3 0 2.27

DuPont Fabros Technology has a consensus price target of $62.11, suggesting a potential downside of 6.33%. Given DuPont Fabros Technology’s higher possible upside, analysts clearly believe DuPont Fabros Technology is more favorable than NRF Holdco.

Insider & Institutional Ownership

69.7% of NRF Holdco shares are held by institutional investors. 2.4% of NRF Holdco shares are held by insiders. Comparatively, 5.6% of DuPont Fabros Technology shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

DuPont Fabros Technology beats NRF Holdco on 8 of the 13 factors compared between the two stocks.

NRF Holdco Company Profile

NRF Holdco LLC. is a commercial real estate company. The Company invests in multiple asset classes across commercial real estate (CRE). Its portfolio consists of healthcare, hotel, manufactured housing communities, net lease and multifamily properties. The Company also invests in other opportunistic real estate investments, such as indirect interests in real estate through its investments in private equity funds (PE Investments). The Company also acquires and operates hotel and certain healthcare properties. The Company’s segments include Real Estate, Commercial Real Estate Debt (CRE debt), Commercial Real Estate Securities, N-Star CDOs and Corporate. Its real estate equity investments that operate under the REIT Investment Diversification and Empowerment Act (RIDEA) structure generate resident and hotel guest related income from short-term residential agreements. The Company is externally managed and advised by an affiliate of NorthStar Asset Management Group Inc.

DuPont Fabros Technology Company Profile

DuPont Fabros Technology, Inc. (DFT) is a real estate investment trust (REIT). The Company owns, acquires, develops and operates wholesale data centers. The Company’s customers include national and international enterprises across various industries, such as technology, Internet, content providers, cloud providers, media, communications, healthcare and financial services. Its data centers are located in four population centers: Northern Virginia; suburban Chicago, Illinois; Piscataway, New Jersey, and Santa Clara, California. As of December 31, 2016, the Company owned various properties, including 11 operating data centers facilities; five phases of existing data center facilities under development; one shell of a data center under development; two data center facilities with a phase or phases available for development, and parcels of land held for development of four data centers. As of December 31, 2016, the Company’s 11 data centers had a total of 3.3 million gross square feet.

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