Digital Realty Trust

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Last up is Digital Realty Trust ( DLR), one of my favorite real estate investment trusts. Digital Realty is a commercial real estate landlord that owns 16.8 million square feet of leasable space used for datacenters, internet gateways, and manufacturing facilities for technology firms.

Digital Realty's niche focus gives it some big advantages. For starters, demand for internet data centers and gateways continues to grow as data-driven services (like cloud storage) continue to grow in popularity. As long as firms need more virtual space to store data, they'll also need more physical space to store servers; that's space that DLR is uniquely qualified to provide. And as a result, switching costs are high for tenants who decide to lease space from Digital Realty.

The firm's legal status as a REIT effectively means that it's a purpose-built income generation machine. Like other commercial REITS, the firm leases properties on a triple-net basis, leaving costs like maintenance, taxes and insurance up to tenants.

DLR is obligated to pay out the vast majority of its income directly to investors in the form of dividends, one reason for the firm's massive 4.55% yield. Investors looking for real estate exposure could do a lot worse than this dividend winner.

To see these dividend plays in action, check out the Dividend Stocks for the Week portfolio on Stockpickr.

And if you haven't already done so, join Stockpickr today to create your own dividend portfolio.

-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS:



Follow Stockpickr on Twitter and become a fan on Facebook.
At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.

If you liked this article you might like

These Stocks Are Ready to Reverse Course

An Uncertain Day for Wall Street Breaks Dow, S&P 500 Record Streak

Stocks Cling to Flatline as Wall Street Awaits Earnings

S&P 500, Nasdaq Rise as Wall Street Plays Earnings Wait-and-See, Apple Climbs