Wednesday, May 27, 2015

Recent Buy - Digital Realty Trust, Inc (DLR)

Hi Everyone,

Well, like I said with the last recent buy post, things have slowed down a bit, but this month my wife and I have now managed to purchase 2 fine companies!  A third purchase may come soon after this one, so stay tuned.  The student loans are paid off and we are 1 wedding down out of the 7 we are attending this year.  With most of the costs such as hotels and gifts paid for already hopefully we can get back to putting more money to work.  

With this purchase, my wife and I have put a total of around $24,000 to work since the beginning of 2015.  My goal of investing roughly $40,000 is coming ever so close! Greater than half way to our goal with still more than half the year left to go...  pretty sweet!  I'm sticking with the REIT theme as they are still depressed due to potential rate hike increases so with that being said, my next purchase was Digital Realty Trust, Inc (DLR)...

We purchased 30 shares of Digital Realty (DLR) at $66.50.  This purchase adds $102.00 of annual dividends to my account.

We now own 30 shares of DLR as this was a new addition which means we are invested in 35 individual companies.  We may add to this position in the future if the REIT's stay depressed or we may add to other REIT companies.  With recent dividend increases, dividend reinvestment and this new position, our forward dividends now stand at around $4,195.48 for the next 12 months. Our portfolio will be updated to reflect this purchase.

DLR Chart:


P/E:  13.5 (based on FFO)
Yield:  5.10%
Market Cap:  9.0B
Dividend Growth Rate (5yr):  5%
Payout Ratio: 70% of FFO

I've noticed a bunch of other bloggers picking up REIT's recently so count me in with the crew.  Digital Realty fills another need within my REIT portion of my portfolio.  Currently, we have O, OHI, WPC and now DLR with regards to REIT's.  O has a very diversified tenant base with well known companies such as Walgreens, Fedex and Dollar General as their top three.  OHI satisfies the aging demographic in the United States by owning nursing facilities.  WPC gives us more diversification into the international REIT space and now, DLR gives us a technology component to our REIT portion of our portfolio.  DLR invests heavily into buildings that support managing big data/cloud businesses.  Think of companies like AMZN or IBM needing facilities that can support their servers and DLR is that facility holder.  DLR also has some financial and retail customers as well so they are diversified a little bit there.

My wife and I are looking to buy Parker-Hannifin next.  They are looking particularly attractive right now but I will be getting a post together discussing the other picks we are looking at such as:  OHI, MO, GLP, DPS, DE, T and BA.  And hopefully letting you readers get to pick what we should buy next!

You can check out all the other purchases we have made for the year on my Stock Purchases and Sells page.

So there you have it, the next building block on the path to the American Dividend Dream!  What do you think, good purchase, bad purchase?  What are you looking to buy next?



  1. Hi ADD,

    Congrats on your purchase in DLR. I personally like the company as well, but the P/E is pretty high.. So I'm not so sure about that? Either way, I'm a lover of all things REIT. Looks like you and your wife have been funneling tons of cash into the market which is great; keep on saving! I wish you the best of luck.

    Best regards,

    1. You cannot judge a REIT by using the P/E ratio. A better ratio to use is the P/FFO. In this case, DLR is about 13.5 which is pretty good compared to what it has been previously.

      Thank you very much for the kind words!

  2. ADD,

    Great job adding DLR. I have owned shares since late 2013. It looks like DLR is more resilient during this wave of interest rate fears than a couple of years ago. I really like the shares a lot. Congrats on the extra $141.


    1. Yea, DLR seems to have held up very well over the past 10 years through good times and bad times. I like the company, I like the dividend and I like the little pullback its had recently so I'm comfortable with the purchase. Hopefully it will pay off for years to come.

      As DM mentioned below, I was a little off with the dividend income so I have changed that, but $102 a year is still pretty good!

      Thanks for stopping by!

  3. ADD,

    Glad to be a fellow shareholder. I averaged down pretty heavily on DLR when it dropped into the $40s a while back. Very fortunate to have had that opportunity, but shares still appear pretty attractive right now.

    Although, I'm not sure you have that dividend amount correct. 30 shares paying $0.85/quarter per share will pay out $102.00 per year, not $141.60. Something I'm missing?

    Keep up the great work over there. You're adding capital at an incredible rate!!

    Best regards.

    1. Thanks for picking up on the mistake DM. I made the change above to $102. When I copied down the line above in my portfolio chart, the dividend went to $1.18 per quarter which is where the 141.60 came from. Either way, 102 is still pretty good and will definitely help us out in the future.

      Great pick up in the 40's!! I wish I could have picked up some at that price but perhaps it will get there some point in the future with the rate hikes to potentially take effect.

      Thanks for taking the time to comment! Just trying to keep up with you!

  4. Nice buy. A lot of bloggers seem to be picking up REITS lately, myself included. I just bought some more O and plan to buy a chunk of OHI next. I haven't really looked into DLR yet, but will now. Happy hunting!

    1. I love OHI as a company/idea for investment. I am already pretty heavily invested in them, or I would have probably bought more of them. If OHI falls another $5, I might pick up some more though. I also love O ... the monthly dividends are awesome. If that falls a few more dollars I might pick up some of them as I am not as heavily invested.

      Keep adding capital and watch those dividends roll in!

      Thanks for commenting.