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

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Digital Realty Trust and Crown Castle, as reported by MarketBeat.

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

Digital Realty Trust presently has a consensus target price of $219.45, indicating a potential upside of 21.32%. Crown Castle has a consensus target price of $95.13, indicating a potential upside of 26.88%. Given Crown Castle’s higher possible upside, analysts plainly believe Crown Castle is more favorable than Digital Realty Trust.

Volatility & Risk

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

Profitability

This table compares Digital Realty Trust and Crown Castle’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%
Crown Castle	20.71%	-51.60%	3.70%

Dividends

Digital Realty Trust pays an annual dividend of $4.88 per share and has a dividend yield of 2.7%. Crown Castle pays an annual dividend of $4.25 per share and has a dividend yield of 5.7%. 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 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. Crown Castle is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Digital Realty Trust	$6.77 billion	9.91	$1.31 billion	$2.06	87.81
Crown Castle	$4.26 billion	7.48	$444.00 million	$1.97	38.06

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 and Insider Ownership

99.7% of Digital Realty Trust shares are owned by institutional investors. Comparatively, 90.8% of Crown Castle shares are owned by institutional investors. 0.2% of Digital Realty Trust shares are owned by company insiders. Comparatively, 0.1% of Crown Castle shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Digital Realty Trust beats Crown Castle 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 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.