Five data center stocks to purchase for dividends and profits allow investors to tap into collation services providers that fit into the information technology (IT) world.
The five data center stocks to purchase for dividends are poised to “outperform” the market, according to ISI Evercore, an investment firm that has begun to cover the industry. ISI Evercore’s coverage will feature U.S.-headquartered colocation services providers, with the industry amassing a total available market of roughly $37 billion, fueled by a compound annual growth rate (CAGR) of 7%.
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Given the foundational, but often underappreciated role of multi-tenant data centers as part of the hybrid IT world, ISI Evercore sees a fertile field for investors. The combination of “exponential data creation,” traffic growth and digital transformation initiatives across enterprise, cloud, service providers, public sector and demand for optimized IT performance should drive sector growth, ISI Evercore wrote in its research note.
Five Data Center Stocks to Purchase for Dividends Through REITs
Plus, the real estate investment trust (REIT) structure makes data center stocks an asset class that should appeal to a broad range of investors, according to ISI Evercore. Despite concerns about the threat of public cloud and commoditization of data center services, ISI Evercore forecasts hyperscale growth for the industry.
“In addition, there are opportunities for companies to differentiate via interconnection and adjacent offerings such as managed services,” ISI Evercore wrote. Within this industry, we favor companies that have global scale and the ability to attach value-added services.”
Equinix Is One of Five Data Center Stocks to Purchase for Dividends
Equinix (NASDAQ: EQIX), of Redwood City, California, is a Silicon Valley, multi-tenant data center provider that allows competing networks to connect and share data traffic securely. The name Equinix was chosen to reflect the company’s focus on equality, neutrality and internet exchange.
ISI Evercore ranked Equinix as one of five data center stocks for dividends and profits that the investment firm expects to beat the market. Equinix nabbed a target price of $950 from ISI Evercore.
Five Data Center Stocks to Purchase for Dividends: Digital Realty Trust
San Francisco’s Digital Realty Trust, Inc. (NYSE: DLR) supports data center, colocation and interconnection strategies of customers worldwide, ranging from cloud and information technology services, communications and social networking. Its clientele also features financial services, manufacturing, energy, health care and consumer markets.
ISI Evercore gave Digital Realty Trust, Inc. (DLR) an outperform rating and a target price of $180.
CyrusOne Rates with Five Data Center Stocks to Purchase for Dividends
Dallas-based CyrusOne, Inc. (NASDAQ: CONE) has a vast portfolio that includes more than 40 enterprise-class facilities across three continents, and more than 4 million square feet of total net rentable square footage. Recent developments at CONE could create near-term catalysts for the stock, ISI Evercore wrote.
Customers lower short and long-term capital and operating costs by designing customized data center solutions tailored to a company’s current and future IT needs. The customers further can reallocate precious IT resources back to driving innovation and growth for their core business.
ISI Evercore wrote positively about the recent return of David Ferdman, CONE’s co-founder, as the company’s chief executive officer, meriting an “attractive valuation” that creates a “tactical buying opportunity” in the stock. The investment bank gave the stock an “outperform” rating and a target price of $100 per share.
CoreSite Realty Joins Five Data Center Stocks to Purchase for Dividends
ISI Evercore added Denver’s CoreSite Realty Corporation (COR) as a fourth data center stock that it included in its new coverage but rated it as an “in line” prospect, not one of the sector’s three stocks that it predicts will “outperform” the market. CoreSite Realty appears “fairly valued” at current levels with a target price of $154, the investment firm wrote. However, CoreSite offers a 3.3% dividend yield that gives the stock extra appeal to dividend investors.The company uses a cloud, interconnection and colocation platform to design, plan and implement its hybrid, multi-cloud IT solution. With CoreSite, businesses can attain cost-effective growth within network-dense edge markets.Growth drivers for the sector include data increases and creation; demand for digital transformation through enhanced IT infrastructures, flexibility and scalability modularity; migration toward a hybrid IT architecture; and adoption of distributed IT architectures becoming the norm, ISI Evercore wrote. In addition, vendors can differentiate their offerings with innovation via value-add services to achieve higher pricing and lower commoditization risk.Also expect the public cloud to be a net positive for the colocation industry, ISI […]
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