Why Equinix REIT Is So Expensive -- but Still a Buy
Equinix (NASDAQ: EQIX) has been an incredible value builder among real estate investment trusts (REITs) over the years. The company, which specializes in the operation, leasing, and management of data centers around the world, has outperformed the S&P 500 by more than 50% during the past decade.
Being a top performer means share prices for Equinix are at a premium. The company's current share price-to-funds from operations (FFO), a common metric used to understand a REIT's valuation, sits at 47.5. A price-to-FFO of 20 times to 30 is where most REITs trade, so it's clear that Equinix is very richly valued. But being expensive doesn't always mean it's not a worthwhile buy.
Equinix was founded in 1998 as a Silicon Valley start-up and has since grown into the largest data-center REIT by market cap and one of the world's largest data-center providers. Today, Equinix owns or has interests in 237 facilities in 27 countries on five continents.
Source Fool.com
