DuPont Fabros Opening Internet Data Centers

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DuPont Fabros Technology has carved out a niche in high-tech real estate: It's a real estate investment trust (REIT) that builds and operates data centers housing servers for some of the country's biggest Internet and computer companies, includingYahoo ( YHOO ),Facebook ( FB ),Rackspace ( RAX ) andMicrosoft ( MSFT ).

DuPont Fabros Technology 's ( DFT ) data centers are huge buildings outwardly resembling office buildings that might be found in an industrial park. But few workers are inside. Instead, there are densely packed rows of servers that are secure and can provide reliable power.

DuPont Fabros operates 10 data centers in Bristow, Va., a huge complex of five data centers in Ashburn, Va., and another in Chicago -- and it recently opened early phases of centers in Piscataway, N.J., and Santa Clara, Calif.

Its spaces comprise 2.6 million square feet and supply 227 megawatts to servers and computer equipment.

Funds from operations, or FFO, the REIT version of earnings, have been growing rapidly. FFO for the past three quarters grew 34%, 50% and 40% from the year-ago periods.

FFO has grown for the past four years and is expected to grow 20% this year and 5% in 2015. Revenue has grown each year since at least 2007.

DuPont Fabros said on May 22 that it will pay a 35-cents-per-share quarterly dividend on July 15 to shareholders of record July 3.

The dividend works out to an annualized yield of 5.3%. REITs avoid paying corporate taxes if they pass through most of their FFO as dividends, so many have impressive yields.

The quarterly dividend has increased each year since it offered a 15-cent dividend in 2007.That's the year the company went public. It was pummeled in the financial crisis, losing 93% of its value.

It has since recovered and broke out of a cup-with-handle base June 3.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: YHOO , FB , RAX , MSFT , DFT

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