Most people think of real estate investment trusts as plodding
stocks that give decent returns over the long haul, but won't
report a blow-out quarter that sends the stock into a frenzy.
DuPont Fabros Technology (
) did just that Thursday when it reported Q2 funds from
operation, the REIT equivalent of earnings, of 61 cents a share
vs. estimates of 31 cents. That's a 30% increase over the
year-ago period. Revenue came in slightly lower than forecasts,
$102 million vs. $102.3 million, but up 11%.
The report sent the stock up sharply in the morning, but it
gave back the gain plus some in the afternoon.
The typical REIT might invest in office buildings, medical
facilities or upscale apartments. But DFT chose a high-growth
business: data centers. It's not far from an all-time high of 29
set in July 2012.
With corporations moving quickly into cloud computing, data
centers are much in demand. DFT designs, builds and manages
It has 10 data centers in Virginia, Chicago, Piscataway, N.J.,
and Santa Clara, Calif. From the outside, they look like modern
office buildings, but without much in the way of windows or
parking lots. Inside, they are row upon row of servers.
In June, the company announced it had opened a new phase of
its Santa Clara facility with 9.1 megawatts of critical load. The
facility was 75% leased on the day it opened. The next phase of
the Santa Clara project is due to open next March.
It has also begun construction of a new phase of its Elk Grove
Village, Ill., facility that is expected to be complete in the
summer of 2015.
When DFT came public in 2007, it offered a 15-cent quarterly
dividend. It's now 35 cents, which works out of a 5% annual
yield. The last dividend was paid July 15 to shareholders of
record July 3.