Reviewing CubeSmart (NYSE:CUBE) and Digital Realty Trust (NYSE:DLR)

Digital Realty Trust (NYSE:DLR) and CubeSmart (NYSE:CUBE) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, risk and dividends.

Dividends

Digital Realty Trust pays an annual dividend of $4.88 per share and has a dividend yield of 3.2%. CubeSmart pays an annual dividend of $2.08 per share and has a dividend yield of 5.7%. Digital Realty Trust pays out 126.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CubeSmart pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CubeSmart has increased its dividend for 16 consecutive years. CubeSmart is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

99.7% of Digital Realty Trust shares are owned by institutional investors. Comparatively, 97.6% of CubeSmart shares are owned by institutional investors. 0.1% of Digital Realty Trust shares are owned by insiders. Comparatively, 1.7% of CubeSmart shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Digital Realty Trust and CubeSmart, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Digital Realty Trust	1	7	15	2	2.72
CubeSmart	0	11	7	0	2.39

Digital Realty Trust currently has a consensus target price of $199.05, indicating a potential upside of 29.60%. CubeSmart has a consensus target price of $45.63, indicating a potential upside of 25.03%. Given Digital Realty Trust’s stronger consensus rating and higher probable upside, analysts plainly believe Digital Realty Trust is more favorable than CubeSmart.

Volatility and Risk

Digital Realty Trust has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, CubeSmart has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Digital Realty Trust	23.67%	6.41%	2.98%
CubeSmart	33.31%	12.49%	5.37%

Earnings & Valuation

This table compares Digital Realty Trust and CubeSmart”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Digital Realty Trust	$5.55 billion	9.50	$615.19 million	$3.87	39.69
CubeSmart	$929.08 million	8.96	$391.18 million	$1.56	23.39

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

Summary

Digital Realty Trust beats CubeSmart on 11 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 CubeSmart

CubeSmart is a self-administered and self-managed real estate investment trust. The Company's self-storage properties are designed to offer affordable, easily accessible and, in most locations, climate-controlled storage space for residential and commercial customers. According to the 2023 Self-Storage Almanac, CubeSmart is one of the top three owners and operators of self-storage properties in the United States.