This real estate investment trust operates data centers worldwide, offering space, connections, and services for cloud, content, network, financial, and enterprise clients. It benefits from rising demand in digital infrastructure, driven by AI and hybrid cloud needs, which boost revenue and bookings. Yet, it faces timing shifts in large deals that could affect short-term fees.
The company reported 5% revenue growth to $2.32 billion in its latest quarter, with monthly recurring revenue up 8% on a normalized basis. Record bookings reached $394 million, up 25% year-over-year, reflecting strong customer additions across sectors like automotive, finance, and retail. It maintains solid liquidity at $2.9 billion, after debt repayments, and a net leverage of 3.6x, supporting expansions. The focus on hyperscale data centers targets big cloud deployments, with $185 million in pre-sales indicating ongoing demand.
Risks include moderated non-recurring revenue from fee timing, but overall momentum in interconnections and AI solutions positions it well. These elements support its 9% 3-year dividend growth rate, appealing to investors seeking compounding returns.
We increased our position in the Dividend Growth Stocks Portfolio because this stock aligns with our focus on consistent payout increases backed by durable cash flows. This action reflects confidence in its ability to deliver long-term appreciation through steady growth in digital services demand.
