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

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

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%

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.

Volatility & Risk

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

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 company insiders. Comparatively, 1.3% of Gladstone Commercial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Digital Realty Trust and Gladstone Commercial, as provided by MarketBeat.com.

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

Earnings and Valuation

This table compares Digital Realty Trust and Gladstone Commercial”s top-line revenue, earnings per share 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.

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.