Key Reasons to Add Digital Realty Stock to Your Portfolio Now

Core Viewpoint - Digital Realty (DLR) is well-positioned for growth due to strong leasing activity, robust demand for data centers, a diverse tenant base, strategic acquisitions, and a solid balance sheet [1] Group 1: Market Demand and Performance - The data center market is booming, driven by cloud computing, IoT, Big Data, and increasing reliance on third-party IT infrastructure [5] - In Q1 2025, Digital Realty signed new leases totaling $242.3 million, with a record backlog of signed but not commenced leases exceeding $1.3 billion [6] - DLR shares have increased by 1.9% over the past three months, while the industry has seen a decline of 0.2% [3] Group 2: Tenant Base and Global Presence - Digital Realty has a high-quality, diversified customer base across various sectors, including cloud content and IT, with over 5,000 global customers [7] - The company operates 308 data centers in more than 50 metropolitan areas, maintaining decent occupancy rates [7] Group 3: Expansion and Development - Digital Realty is expanding its footprint, including a joint venture in Indonesia to develop data centers, enhancing its presence in the Asia-Pacific region [8] - The company acquired land parcels in Charlotte, NC, for $36 million and around 100 acres in Atlanta for approximately $120 million, expected to support future revenue growth [9][10] - As of March 31, 2025, DLR has 9.5 million square feet under active development and plans to incur capital expenditures of $3.0-$3.5 billion for development activities in 2025 [11] Group 4: Financial Strength - Digital Realty has a strong balance sheet with $2.32 billion in cash and cash equivalents as of Q1 2025, and a well-laddered debt maturity schedule with a 2.6% weighted average coupon [12] - The company's net debt-to-adjusted EBITDA ratio is 5.1X, and its fixed charge coverage is 4.9X, indicating solid financial health [12] - DLR holds favorable credit ratings from Fitch, S&P, and Moody's, which enhance its access to debt markets and reduce borrowing costs [12]