Digital Realty Trust Inc. (DLR): Today's Featured Real Estate Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Digital Realty ( DLR) pushed the Real Estate industry lower today making it today's featured Real Estate laggard. The industry as a whole closed the day down 0.1%. By the end of trading, Digital Realty fell $1.27 (-1.7%) to $71.99 on average volume. Throughout the day, 1.6 million shares of Digital Realty exchanged hands as compared to its average daily volume of 1.3 million shares. The stock ranged in price between $71.94-$73.80 after having opened the day at $73.35 as compared to the previous trading day's close of $73.26. Other companies within the Real Estate industry that declined today were: American Spectrum Realty ( AQQ), down 8.1%, New England Realty Associates ( NEN), down 5.7%, Roberts Realty Investors ( RPI), down 4.6%, and Maui Land & Pineapple Company ( MLP), down 4.5%.
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Digital Realty Trust, Inc., a real estate investment trust (REIT), through its controlling interest in Digital Realty Trust, L.P., engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. Digital Realty has a market cap of $8.96 billion and is part of the financial sector. The company has a P/E ratio of 52.1, below the average real estate industry P/E ratio of 52.5 and above the S&P 500 P/E ratio of 17.7. Shares are up 9.9% year to date as of the close of trading on Tuesday. Currently there are nine analysts that rate Digital Realty a buy, two analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates Digital Realty as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, revenue growth, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

On the positive front, Income Opportunity Realty Investors ( IOT), up 18.4%, Nationstar Mortgage Holdings ( NSM), up 5.3%, HMG/Courtland Properties ( HMG), up 5.3%, and Alto Palermo ( APSA), up 4.8%, were all gainers within the real estate industry with CBRE Group ( CBG) being today's featured real estate industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the real estate industry could consider iShares Dow Jones US Real Estate ( IYR) while those bearish on the real estate industry could consider ProShares Short Real Estate Fund ( REK).

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