Intrinsic value of Digital Realty Trust - DLR

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$120.54

  Intrinsic Value

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  Value-price divergence*

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$120.54

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of DLR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 19.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  21.50
  15.40
  14.36
  13.42
  12.58
  11.82
  11.14
  10.53
  9.97
  9.48
  9.03
  8.63
  8.26
  7.94
  7.64
  7.38
  7.14
  6.93
  6.73
  6.56
  6.40
  6.26
  6.14
  6.02
  5.92
  5.83
  5.75
  5.67
  5.60
  5.54
  5.49
Revenue, $m
  2,142
  2,472
  2,827
  3,206
  3,610
  4,036
  4,486
  4,958
  5,453
  5,970
  6,509
  7,070
  7,655
  8,262
  8,894
  9,550
  10,232
  10,941
  11,678
  12,444
  13,241
  14,070
  14,934
  15,833
  16,771
  17,749
  18,769
  19,833
  20,945
  22,106
  23,320
Variable operating expenses, $m
 
  1,840
  2,093
  2,364
  2,652
  2,957
  3,278
  3,615
  3,968
  4,337
  4,722
  5,047
  5,464
  5,898
  6,349
  6,817
  7,304
  7,810
  8,336
  8,883
  9,452
  10,044
  10,660
  11,303
  11,972
  12,670
  13,398
  14,158
  14,951
  15,780
  16,647
Fixed operating expenses, $m
 
  43
  44
  45
  46
  48
  49
  50
  51
  52
  54
  55
  56
  58
  59
  61
  62
  64
  66
  67
  69
  71
  72
  74
  76
  78
  80
  82
  84
  86
  88
Total operating expenses, $m
  1,646
  1,883
  2,137
  2,409
  2,698
  3,005
  3,327
  3,665
  4,019
  4,389
  4,776
  5,102
  5,520
  5,956
  6,408
  6,878
  7,366
  7,874
  8,402
  8,950
  9,521
  10,115
  10,732
  11,377
  12,048
  12,748
  13,478
  14,240
  15,035
  15,866
  16,735
Operating income, $m
  496
  589
  689
  797
  911
  1,032
  1,160
  1,294
  1,434
  1,581
  1,733
  1,968
  2,134
  2,306
  2,486
  2,672
  2,866
  3,067
  3,276
  3,494
  3,720
  3,956
  4,201
  4,457
  4,723
  5,001
  5,291
  5,594
  5,910
  6,240
  6,585
EBITDA, $m
  1,015
  1,175
  1,348
  1,534
  1,732
  1,941
  2,161
  2,393
  2,635
  2,888
  3,153
  3,428
  3,714
  4,012
  4,322
  4,644
  4,978
  5,326
  5,687
  6,063
  6,454
  6,861
  7,284
  7,726
  8,186
  8,665
  9,166
  9,688
  10,234
  10,804
  11,400
Interest expense (income), $m
  217
  204
  243
  284
  328
  374
  424
  476
  531
  588
  648
  711
  776
  843
  914
  987
  1,063
  1,142
  1,224
  1,310
  1,399
  1,491
  1,587
  1,687
  1,792
  1,900
  2,014
  2,132
  2,255
  2,384
  2,519
Earnings before tax, $m
  442
  385
  447
  513
  584
  658
  736
  818
  903
  992
  1,085
  1,258
  1,358
  1,463
  1,572
  1,685
  1,802
  1,925
  2,052
  2,184
  2,321
  2,465
  2,614
  2,769
  2,931
  3,101
  3,277
  3,462
  3,654
  3,856
  4,066
Tax expense, $m
  10
  104
  121
  139
  158
  178
  199
  221
  244
  268
  293
  340
  367
  395
  424
  455
  487
  520
  554
  590
  627
  665
  706
  748
  791
  837
  885
  935
  987
  1,041
  1,098
Net income, $m
  426
  281
  326
  375
  426
  480
  537
  597
  659
  724
  792
  918
  991
  1,068
  1,147
  1,230
  1,316
  1,405
  1,498
  1,594
  1,695
  1,799
  1,908
  2,022
  2,140
  2,263
  2,392
  2,527
  2,668
  2,815
  2,968

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  11
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  12,193
  14,045
  16,062
  18,218
  20,510
  22,935
  25,490
  28,173
  30,983
  33,919
  36,982
  40,172
  43,492
  46,944
  50,532
  54,261
  58,136
  62,163
  66,349
  70,703
  75,231
  79,944
  84,851
  89,962
  95,290
  100,845
  106,640
  112,688
  119,004
  125,602
  132,498
Adjusted assets (=assets-cash), $m
  12,182
  14,045
  16,062
  18,218
  20,510
  22,935
  25,490
  28,173
  30,983
  33,919
  36,982
  40,172
  43,492
  46,944
  50,532
  54,261
  58,136
  62,163
  66,349
  70,703
  75,231
  79,944
  84,851
  89,962
  95,290
  100,845
  106,640
  112,688
  119,004
  125,602
  132,498
Revenue / Adjusted assets
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
  0.176
Average production assets, $m
  10,261
  11,840
  13,541
  15,358
  17,290
  19,335
  21,489
  23,751
  26,120
  28,595
  31,177
  33,867
  36,665
  39,576
  42,601
  45,744
  49,011
  52,406
  55,935
  59,605
  63,423
  67,396
  71,533
  75,842
  80,333
  85,016
  89,902
  95,001
  100,325
  105,888
  111,701
Working capital, $m
  0
  -12
  -14
  -16
  -18
  -20
  -22
  -25
  -27
  -30
  -33
  -35
  -38
  -41
  -44
  -48
  -51
  -55
  -58
  -62
  -66
  -70
  -75
  -79
  -84
  -89
  -94
  -99
  -105
  -111
  -117
Total debt, $m
  5,839
  6,930
  8,106
  9,363
  10,699
  12,113
  13,603
  15,167
  16,805
  18,517
  20,303
  22,162
  24,098
  26,110
  28,202
  30,376
  32,635
  34,983
  37,424
  39,962
  42,602
  45,349
  48,210
  51,190
  54,296
  57,534
  60,913
  64,439
  68,121
  71,968
  75,988
Total liabilities, $m
  7,097
  8,188
  9,364
  10,621
  11,957
  13,371
  14,861
  16,425
  18,063
  19,775
  21,561
  23,420
  25,356
  27,368
  29,460
  31,634
  33,893
  36,241
  38,682
  41,220
  43,860
  46,607
  49,468
  52,448
  55,554
  58,792
  62,171
  65,697
  69,379
  73,226
  77,246
Total equity, $m
  5,096
  5,857
  6,698
  7,597
  8,553
  9,564
  10,629
  11,748
  12,920
  14,144
  15,422
  16,752
  18,136
  19,576
  21,072
  22,627
  24,243
  25,922
  27,668
  29,483
  31,371
  33,337
  35,383
  37,514
  39,736
  42,052
  44,469
  46,991
  49,625
  52,376
  55,251
Total liabilities and equity, $m
  12,193
  14,045
  16,062
  18,218
  20,510
  22,935
  25,490
  28,173
  30,983
  33,919
  36,983
  40,172
  43,492
  46,944
  50,532
  54,261
  58,136
  62,163
  66,350
  70,703
  75,231
  79,944
  84,851
  89,962
  95,290
  100,844
  106,640
  112,688
  119,004
  125,602
  132,497
Debt-to-equity ratio
  1.146
  1.180
  1.210
  1.230
  1.250
  1.270
  1.280
  1.290
  1.300
  1.310
  1.320
  1.320
  1.330
  1.330
  1.340
  1.340
  1.350
  1.350
  1.350
  1.360
  1.360
  1.360
  1.360
  1.360
  1.370
  1.370
  1.370
  1.370
  1.370
  1.370
  1.380
Adjusted equity ratio
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  426
  281
  326
  375
  426
  480
  537
  597
  659
  724
  792
  918
  991
  1,068
  1,147
  1,230
  1,316
  1,405
  1,498
  1,594
  1,695
  1,799
  1,908
  2,022
  2,140
  2,263
  2,392
  2,527
  2,668
  2,815
  2,968
Depreciation, amort., depletion, $m
  519
  586
  659
  737
  821
  909
  1,002
  1,099
  1,201
  1,308
  1,419
  1,460
  1,580
  1,706
  1,836
  1,972
  2,113
  2,259
  2,411
  2,569
  2,734
  2,905
  3,083
  3,269
  3,463
  3,664
  3,875
  4,095
  4,324
  4,564
  4,815
Funds from operations, $m
  868
  866
  985
  1,112
  1,247
  1,389
  1,539
  1,696
  1,860
  2,032
  2,211
  2,378
  2,572
  2,774
  2,984
  3,202
  3,428
  3,664
  3,909
  4,163
  4,428
  4,704
  4,991
  5,291
  5,603
  5,928
  6,267
  6,622
  6,992
  7,379
  7,783
Change in working capital, $m
  -44
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
Cash from operations, $m
  912
  1,041
  987
  1,114
  1,249
  1,391
  1,541
  1,698
  1,863
  2,035
  2,214
  2,381
  2,575
  2,777
  2,987
  3,205
  3,432
  3,667
  3,912
  4,167
  4,432
  4,708
  4,996
  5,295
  5,607
  5,933
  6,273
  6,627
  6,997
  7,384
  7,789
Maintenance CAPEX, $m
  0
  -442
  -510
  -584
  -662
  -745
  -833
  -926
  -1,024
  -1,126
  -1,233
  -1,344
  -1,460
  -1,580
  -1,706
  -1,836
  -1,972
  -2,113
  -2,259
  -2,411
  -2,569
  -2,734
  -2,905
  -3,083
  -3,269
  -3,463
  -3,664
  -3,875
  -4,095
  -4,324
  -4,564
New CAPEX, $m
  -873
  -1,579
  -1,700
  -1,818
  -1,932
  -2,044
  -2,154
  -2,262
  -2,369
  -2,475
  -2,582
  -2,689
  -2,799
  -2,910
  -3,025
  -3,144
  -3,267
  -3,395
  -3,529
  -3,670
  -3,818
  -3,973
  -4,137
  -4,309
  -4,491
  -4,683
  -4,886
  -5,099
  -5,325
  -5,562
  -5,813
Cash from investing activities, $m
  -1,299
  -2,021
  -2,210
  -2,402
  -2,594
  -2,789
  -2,987
  -3,188
  -3,393
  -3,601
  -3,815
  -4,033
  -4,259
  -4,490
  -4,731
  -4,980
  -5,239
  -5,508
  -5,788
  -6,081
  -6,387
  -6,707
  -7,042
  -7,392
  -7,760
  -8,146
  -8,550
  -8,974
  -9,420
  -9,886
  -10,377
Free cash flow, $m
  -387
  -980
  -1,224
  -1,287
  -1,346
  -1,399
  -1,447
  -1,490
  -1,530
  -1,566
  -1,600
  -1,653
  -1,684
  -1,714
  -1,744
  -1,775
  -1,807
  -1,840
  -1,876
  -1,914
  -1,954
  -1,998
  -2,046
  -2,097
  -2,153
  -2,213
  -2,278
  -2,347
  -2,422
  -2,502
  -2,588
Issuance/(repayment) of debt, $m
  197
  1,091
  1,176
  1,257
  1,336
  1,414
  1,490
  1,564
  1,638
  1,712
  1,786
  1,860
  1,935
  2,013
  2,092
  2,174
  2,259
  2,348
  2,441
  2,538
  2,640
  2,748
  2,861
  2,980
  3,106
  3,239
  3,379
  3,526
  3,682
  3,847
  4,020
Issuance/(repurchase) of shares, $m
  806
  650
  889
  930
  965
  996
  1,022
  1,045
  1,063
  1,079
  1,092
  1,123
  1,133
  1,141
  1,148
  1,156
  1,164
  1,172
  1,181
  1,191
  1,203
  1,216
  1,231
  1,249
  1,269
  1,291
  1,316
  1,343
  1,373
  1,407
  1,444
Cash from financing (excl. dividends), $m  
  957
  1,741
  2,065
  2,187
  2,301
  2,410
  2,512
  2,609
  2,701
  2,791
  2,878
  2,983
  3,068
  3,154
  3,240
  3,330
  3,423
  3,520
  3,622
  3,729
  3,843
  3,964
  4,092
  4,229
  4,375
  4,530
  4,695
  4,869
  5,055
  5,254
  5,464
Total cash flow (excl. dividends), $m
  558
  111
  -48
  -30
  -9
  15
  43
  74
  108
  145
  185
  207
  252
  299
  348
  399
  452
  508
  565
  624
  686
  749
  815
  883
  953
  1,026
  1,101
  1,179
  1,260
  1,344
  1,432
Retained Cash Flow (-), $m
  -596
  -772
  -841
  -899
  -956
  -1,011
  -1,066
  -1,119
  -1,172
  -1,224
  -1,277
  -1,330
  -1,384
  -1,440
  -1,496
  -1,555
  -1,616
  -1,679
  -1,746
  -1,815
  -1,888
  -1,965
  -2,046
  -2,132
  -2,221
  -2,316
  -2,417
  -2,522
  -2,634
  -2,751
  -2,875
Prev. year cash balance distribution, $m
 
  11
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Discount rate, %
 
  8.80
  9.24
  9.70
  10.19
  10.70
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
  21.18
  22.24
  23.35
  24.52
  25.74
  27.03
  28.38
  29.80
  31.29
  32.85
  34.50
  36.22
PV of cash for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  96.7
  93.0
  89.7
  86.8
  84.2
  81.9
  79.8
  77.9
  76.2
  74.7
  73.3
  72.0
  70.8
  69.7
  68.7
  67.8
  66.9
  66.1
  65.4
  64.7
  64.0
  63.4
  62.8
  62.3
  61.7
  61.2
  60.8
  60.3
  59.8
  59.4

Digital Realty Trust, Inc., a real estate investment trust (REIT), through its controlling interest in Digital Realty Trust, L.P., engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. It focuses on strategically located properties containing applications and operations critical to the day-to-day operations of technology industry tenants and corporate enterprise datacenter users, including the information technology departments of Fortune 1000 companies, and financial services companies. The company’s property portfolio consists of Internet gateway properties, corporate datacenter properties, technology manufacturing properties, and regional or national offices of technology companies. As of December 31, 2008, Digital Realty’s portfolio consisted of 75 properties, including 62 located in North America and 13 located in Europe. Digital Realty Trust has elected to be treated as a REIT for federal income tax purposes and would not be subject to income tax, if it distributes at least 90% of its REIT taxable income to its stockholders. The company was founded in 2004 and is headquartered in San Francisco, California with additional offices in Boston, Chicago, Dallas, Los Angeles, New York, Northern Virginia, and Phoenix, as well as in Dublin, London, and Paris.

FINANCIAL RATIOS  of  Digital Realty Trust (DLR)

Valuation Ratios
P/E Ratio 45
Price to Sales 8.9
Price to Book 3.8
Price to Tangible Book
Price to Cash Flow 21
Price to Free Cash Flow 491.5
Growth Rates
Sales Growth Rate 21.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 781.8%
Cap. Spend. - 3 Yr. Gr. Rate 38.7%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 114.6%
Total Debt to Equity 114.6%
Interest Coverage 3
Management Effectiveness
Return On Assets 5.4%
Ret/ On Assets - 3 Yr. Avg. 4.7%
Return On Total Capital 4%
Ret/ On T. Cap. - 3 Yr. Avg. 3.2%
Return On Equity 8.9%
Return On Equity - 3 Yr. Avg. 7.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 64.4%
Gross Margin - 3 Yr. Avg. 63.7%
EBITDA Margin 55%
EBITDA Margin - 3 Yr. Avg. 54.5%
Operating Margin 23.2%
Oper. Margin - 3 Yr. Avg. 20.6%
Pre-Tax Margin 20.6%
Pre-Tax Margin - 3 Yr. Avg. 17%
Net Profit Margin 19.9%
Net Profit Margin - 3 Yr. Avg. 16.4%
Effective Tax Rate 2.3%
Eff/ Tax Rate - 3 Yr. Avg. 2.4%
Payout Ratio 142%

DLR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DLR stock intrinsic value calculation we used $2142 million for the last fiscal year's total revenue generated by Digital Realty Trust. The default revenue input number comes from 2016 income statement of Digital Realty Trust. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DLR stock valuation model: a) initial revenue growth rate of 15.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.8%, whose default value for DLR is calculated based on our internal credit rating of Digital Realty Trust, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Digital Realty Trust.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DLR stock the variable cost ratio is equal to 74.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $42 million in the base year in the intrinsic value calculation for DLR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Digital Realty Trust.

Corporate tax rate of 27% is the nominal tax rate for Digital Realty Trust. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DLR stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DLR are equal to 479%.

Life of production assets of 23.2 years is the average useful life of capital assets used in Digital Realty Trust operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DLR is equal to -0.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5096 million for Digital Realty Trust - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 159.571 million for Digital Realty Trust is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Digital Realty Trust at the current share price and the inputted number of shares is $19.2 billion.


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COMPANY NEWS

▶ [$$] The Growing Allure of Data-Center REITs   [Jun-17-17 01:07AM  Barrons.com]
▶ Company News for June 12, 2017   [10:15AM  Zacks]
▶ New Deal Creates Largest Data Center REIT   [Jun-09-17 06:18PM  Barrons.com]
▶ Digital Realty to buy DuPont Fabros in $7.6 billion deal   [03:59PM  American City Business Journals]
▶ Aligned Energy names former Digital Realty Trust exec to its new CEO position in DFW   [Jun-05-17 03:10PM  American City Business Journals]
▶ 3 Dividend Stocks for Ambitious Investors   [May-25-17 09:12AM  Motley Fool]
▶ Digital Realty Trust Earnings: Strong Growth and More   [Apr-28-17 04:02PM  Motley Fool]
▶ Digital Realty Trust reports 1Q results   [Apr-27-17 04:38PM  Associated Press]
▶ Investing In This Explosive REIT Sector   [Apr-20-17 10:39AM  Forbes]
▶ Squirreling Away REIT Dividends   [07:00AM  Forbes]
▶ These 3 Stocks Just Raised Their Dividends   [Mar-30-17 10:01AM  Motley Fool]
▶ Own the Cloud Without the Hard Cost of Hardware   [Mar-19-17 12:01PM  TheStreet.com]
▶ 6 Great Data Center REITs For 2017   [Mar-13-17 12:03PM  Motley Fool]
▶ Dividend Growth Stocks Raising The Bar   [09:28AM  at Insider Monkey]
▶ Expect a Dividend Hike Soon for This Red-Hot REIT   [Feb-15-17 05:41PM  Gurufocus]
▶ Start 2017 off Right with 2 Great Dividend Stocks   [Jan-26-17 11:43AM  at Motley Fool]
▶ Digital Realty Announces Tax Treatment of 2016 Dividends   [Jan-24-17 04:05PM  PR Newswire]
▶ 3 Top Stocks for Your IRA   [Dec-28-16 11:52AM  at Motley Fool]
Stock chart of DLR Financial statements of DLR Annual reports of DLR
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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