On Thursday, real estate investment trust Digital Realty Trust earned a positive adjustment to its Relative Strength (RS) Rating, from 75 to 81, pushing its stock up into a select group. Digital Realty stock was down Thursday in sync with market consolidation, though it recovered some in the afternoon.
Digital Realty Stock Pays 2 Ways
By law REITs are required to pay a minimum 90% of their taxable income to shareholders, making REITs a good choice for income-oriented investors. Some REITs, like Digital Realty Trust, are also seeing strong stock price gains. The upgraded 81 RS Rating for Digital Realty stock puts it in the top 19% of all stocks, regardless of industry, for stock price appreciation over the last 12 months.
Market research shows that the best stocks typically have an RS Rating north of 80 as they begin their biggest price moves. Digital Realty stock just joined that elite group.
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Austin, Texas-based Digital Realty Trust's revenue growth has accelerated over the last year. It rose from 4% to 5%, 11% and then 19% last quarter, to $1.34 billion. Earnings have been more erratic. Digital Realty recorded a 58% drop in EPS four quarters ago, then a 70% jump, another big drop, then a 14% dip last quarter to 19 cents per share.
DLR Stock Near 5 Month High
Still, watchlist candidate Digital Realty stock recently moved more than 5% past a 108.85 entry in a first-stage cup with handle, meaning it's now out of the buy zone for that pattern. However, its shares climbed 41% from an intraday low 86.33 on May 24 to a 122.09 close on Wednesday, just shy of its most recent high at 122.43 on Feb. 2.
Digital Realty earns the No. 15 rank among the 167 companies in the Finance-Property REITs industry group. Equinix and American Homes 4 Rent are also among the group's highest-ranked stocks.
When looking for the best stocks to buy and watch, keep a close on eye on relative price strength.
IBD's unique Relative Strength Rating identifies share price action with a 1 (worst) to 99 (best) score. The grade shows how a stock's price movement over the trailing 52 weeks compares to all the other stocks in our database.
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