D uPont Fabros Technology ( DFT ), like other real estate investment trusts, has been hit by concerns that higher interest rates will crimp its finances and make the stock less attractive.
Shares have fallen 14% from a 52-week high amid speculation that the Federal Reserve will hike interest rates as early as June, eroding its yield advantage over bonds and other investments.
After a strong 2014, DuPont Fabros is down nearly 2% this year, while the S&P 500 is up 1.8%.
Yet investors have reasons to consider the stock. The company's annualized dividend of $1.68 per share yields 5.1% at the current share price. That's far above the S&P 500 average of 1.95% and much better than, say, 10-year U.S. Treasuries, which yield 1.9%.
Furthermore, DuPont Fabros' long-term dividend growth rate is a robust 35%. The company's quarterly payout has nearly tripled from 15 cents a share in the third quarter of 2012. The latest increase came in the fourth quarter of last year -- a hike of 7 cents, or 20%, to 42 cents a share.
DuPont Fabros operates 11 data centers in the U.S. that are packed with servers used to store and retrieve a growing number of photos, emails and other digital records.
The Cisco Global Cloud Index, released in November, forecast that annual global data-center traffic will nearly triple from 2013 to 2018. Nevertheless, DuPont Fabros has posted four straight quarters of slowing growth in funds from operations. Sales growth also has been on a downtrend.
Results for the first quarter, due May 7, are expected to show that FFO fell 5% to 56 cents a share. Revenue is seen as rising 4% to $106.6 million, the smallest gain in years.
The stock plunged nearly 8% on Feb. 5, slicing through its 50-day moving average, after disappointing Q4 results. It's since been trying to rebound as it shapes a new base.