Gladstone Commercial (NASDAQ:GOOD) and Digital Realty Trust (NYSE:DLR) Financial Analysis

Digital Realty Trust (NYSE:DLR) and Gladstone Commercial (NASDAQ:GOOD) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Digital Realty Trust and Gladstone Commercial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Digital Realty Trust	0	8	20	1	2.76
Gladstone Commercial	0	3	0	0	2.00

Digital Realty Trust currently has a consensus price target of $216.81, suggesting a potential upside of 25.26%. Gladstone Commercial has a consensus price target of $12.75, suggesting a potential upside of 1.03%. Given Digital Realty Trust’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Digital Realty Trust is more favorable than Gladstone Commercial.

Volatility and Risk

Digital Realty Trust has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, Gladstone Commercial has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Earnings & Valuation

This table compares Digital Realty Trust and Gladstone Commercial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Digital Realty Trust	$6.34 billion	9.59	$1.31 billion	$3.79	45.67
Gladstone Commercial	$165.74 million	3.69	$19.29 million	$0.18	70.11

Digital Realty Trust has higher revenue and earnings than Gladstone Commercial. Digital Realty Trust is trading at a lower price-to-earnings ratio than Gladstone Commercial, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

99.7% of Digital Realty Trust shares are held by institutional investors. Comparatively, 45.5% of Gladstone Commercial shares are held by institutional investors. 0.2% of Digital Realty Trust shares are held by insiders. Comparatively, 1.3% of Gladstone Commercial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Digital Realty Trust pays an annual dividend of $4.88 per share and has a dividend yield of 2.8%. Gladstone Commercial pays an annual dividend of $1.20 per share and has a dividend yield of 9.5%. Digital Realty Trust pays out 128.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gladstone Commercial pays out 666.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Digital Realty Trust and Gladstone Commercial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Digital Realty Trust	21.73%	6.05%	2.82%
Gladstone Commercial	12.74%	12.11%	1.71%

Summary

Digital Realty Trust beats Gladstone Commercial on 12 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 Gladstone Commercial

Gladstone Commercial Corporation is a real estate investment trust focused on acquiring, owning, and operating net leased industrial and office properties across the United States. Including payments through January 2024, Gladstone Commercial has paid 229 consecutive monthly cash distributions on its common stock. Prior to paying distributions on a monthly basis, Gladstone Commercial paid five consecutive quarterly cash distributions. Gladstone Commercial has never skipped or deferred a distribution since its inception in 2003.