Dividend‐yield calculation (based on the new quarterly payout)
- Common stock: The board approved a $0.21 per‑share quarterly cash dividend (≈ $0.84 annually). With Digital Realty’s common‑stock price hovering around $150 (the current trading level at the time of the announcement), the annualized dividend yield works out to roughly 0.6 % ( $0.84 ÷ $150 ≈ 0.56 %).
- Preferred stock (Series B): The quarterly payout is $0.46 per share (≈ $1.84 annually). The preferred shares are trading near $25 per share, delivering an annualized yield of about 7.3 % ( $1.84 ÷ $25 ≈ 7.3 %).
Trading implications
The common‑share yield remains modest, reflecting DLR’s focus on growth rather than high income; the stock is likely to stay a low‑yield, high‑quality dividend play for investors seeking exposure to data‑center fundamentals. The preferred‑share yield, by contrast, is relatively attractive for income‑oriented investors, especially given the firm’s strong balance sheet and consistent cash‑flow generation. However, preferred shares carry higher interest‑rate sensitivity—if rates rise, the premium on the preferred may be pressured, and the higher yield could be offset by a price decline.
Actionable insight
- Long‑term investors may consider holding the common shares for capital appreciation and modest income, especially if the stock continues to trade at a premium to its historic 0.6 % yield.
- Income‑focused traders could target the preferred stock for its ~7 % yield, but should monitor interest‑rate moves and credit spreads; a short‑term pull‑back in the preferred’s price could create a buying opportunity, while a sudden rise in yields may pressure the price. In either case, maintain a stop‑loss roughly 5–7 % below entry to guard against a rapid shift in market sentiment.