Digital Realty Boosts Dividend 6.4%

NEW YORK (TheStreet) -- Digital Realty Trust (DLR), a leading data center landlord, announced Wednesday it is increasing its common stock dividend by 5 cents to 83 cents per share. This new increase represents a 6.4% hike over the 2013 annualized dividend of $3.12 per share. The quarterly common stock dividend of 83 cents per share will be paid to common stockholders of record as of March 14.

The board authorized a preferred stock dividend of 43.750 cents per share to be paid to holders of record of the company's 7.000% series E cumulative redeemable preferred stock as of March 14. Holders of record of the company's 6.625% series F cumulative redeemable preferred stock as of March 14 are entitled to a preferred stock dividend of 41.4063 cents per share.

The company's board also authorized a preferred stock dividend of 36.7188 cents per share to holders of record of the company's 5.875% series G cumulative redeemable preferred stock as of March 14. The payout date is March 31 for all dividends.

Digital Realty has finally started to recover from a turbulent year in 2013 starting with the Highfields Capital short on May 8 and then the Federal Reserve taper tantrum on May 22. Then two botched earnings calls on July 26 and Oct. 30 that collectively cost the stock 23% as shares slid from $65.40 to a bottom of around $49.

Digital Realty stock closed at $52.91 Wednesday, up 7.7% for the year to date.

Much of the selloff in Digital Realty shares had more to do with the sustainability of the dividend and the potential impact to the competitive moat that the $12.4 billion real estate investment trust enjoys. As the demand in cloud storage continues to explode, some fear Digital could one day be a competitor for the big cloud players Google (GOOG), Amazon (AMZN) and Facebook (FB).

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