Is This Dividend Juggernaut's Growth Streak in Trouble?
Digital Realty (NYSE: DLR) is in a select group. It's one of only a handful of real estate investment trusts (REITs) that has increased its dividends every year of its public existence. The data center operator last gave investors a 5% raise in March of 2022, marking its 17th straight year of dividend growth.
However, that streak might be in trouble. The data center REIT recently reported its results for 2022 and outlook for the coming year, which showed that its cash flow might not grow in 2023. Combined with its rising leverage ratio, Digital Realty might not be able to continue growing its dividend.
Digital Realty battled several headwinds last year. Despite those issues, the company continued to grow. Revenue increased by 6% to nearly $4.7 billion, while core funds from operations (FFO) per share rose 2.6% from $6.53 in 2021 to $6.70 last year. Core FFO would have been $6.91 in 2022 if it wasn't for the impact of foreign exchange fluctuations. Meanwhile, higher power prices and other costs caused its same-store cash net operating income (NOI) to decline by 5.8% last year. The company was able to offset those headwinds and grow core FFO thanks to a boost from acquisitions and development projects.
Source Fool.com
