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 up 0.3%. By the end of trading, Digital Realty fell $1.05 (-1.4%) to $72.60 on average volume. Throughout the day, 1,145,298 shares of Digital Realty exchanged hands as compared to its average daily volume of 1,424,600 shares. The stock ranged in price between $72.46-$73.84 after having opened the day at $73.73 as compared to the previous trading day's close of $73.65. Other companies within the Real Estate industry that declined today were: Homex Development ( HXM), down 7.0%, CoreSite Realty ( COR), down 5.5%, BRASILAGRO - CIA Bras de Prop Agricolas ( LND), down 4.7% and Gladstone Commercial Corporation ( GOOD), down 2.8%.
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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 $9.4 billion and is part of the financial sector. The company has a P/E ratio of 49.5, above the S&P 500 P/E ratio of 17.7. Shares are up 8.5% year to date as of the close of trading on Tuesday.

TheStreet Ratings rates Digital Realty as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, good cash flow from operations, compelling growth in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

On the positive front, Doral Financial ( DRL), down 5.8%, InnSuites Hospitality ( IHT), down 5.1%, Vestin Realty Mortgage I ( VRTA), down 4.7% and Vestin Realty Mortgage II ( VRTB), down 4.2% , were all gainers within the real estate industry with Weyerhaeuser ( WY) 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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