QTS Realty Trust (QTS) & CyrusOne (CONE) Critical Comparison

QTS Realty Trust (NYSE: QTS) and CyrusOne (NASDAQ:CONE) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.

Insider and Institutional Ownership

96.7% of CyrusOne shares are owned by institutional investors. 17.3% of QTS Realty Trust shares are owned by company insiders. Comparatively, 1.6% of CyrusOne shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares QTS Realty Trust and CyrusOne’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
QTS Realty Trust $422.74 million 6.44 $158.07 million $0.40 139.50
CyrusOne $597.40 million 9.58 $296.60 million ($0.31) -209.51

CyrusOne has higher revenue and earnings than QTS Realty Trust. CyrusOne is trading at a lower price-to-earnings ratio than QTS Realty Trust, indicating that it is currently the more affordable of the two stocks.

Dividends

QTS Realty Trust pays an annual dividend of $1.56 per share and has a dividend yield of 2.8%. CyrusOne pays an annual dividend of $1.68 per share and has a dividend yield of 2.6%. QTS Realty Trust pays out 390.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CyrusOne pays out -541.9% of its earnings in the form of a dividend. CyrusOne has raised its dividend for 2 consecutive years.

Analyst Recommendations

This is a summary of current ratings for QTS Realty Trust and CyrusOne, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QTS Realty Trust 0 4 9 0 2.69
CyrusOne 1 1 10 0 2.75

QTS Realty Trust presently has a consensus target price of $56.92, suggesting a potential upside of 2.00%. CyrusOne has a consensus target price of $61.00, suggesting a potential downside of 6.08%. Given QTS Realty Trust’s higher probable upside, equities research analysts plainly believe QTS Realty Trust is more favorable than CyrusOne.

Profitability

This table compares QTS Realty Trust and CyrusOne’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
QTS Realty Trust 4.60% 2.04% 0.93%
CyrusOne -4.35% 1.30% 0.52%

Risk and Volatility

QTS Realty Trust has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500. Comparatively, CyrusOne has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Summary

CyrusOne beats QTS Realty Trust on 9 of the 16 factors compared between the two stocks.

About QTS Realty Trust

QTS Realty Trust, Inc. (QTS) is a provider of secure, compliant data center solutions, hybrid cloud and fully managed services. The Company owns, develops and operates carrier-neutral and multi-tenant data centers. Its data centers are facilities that house the network and computer equipment of multiple customers and provide access to a range of communications carriers. The Company has an integrated platform through which it owns and operates its data centers and provides a range of information technology (IT) infrastructure solutions. Its spectrum of core data center products is referred to as 3Cs, which consists of Custom Data Center (C1), Colocation (C2), and Cloud and Managed Services (C3). Its 3C integrated technology platform provides information technology solutions for Web and information technology applications. Its data centers facilities are used by its customers to house, power and cool the networking equipment and computer systems that support their business processes.

About CyrusOne

CyrusOne Inc. is a real estate investment trust. The Company is an owner, operator and developer of enterprise-class, carrier-neutral, multi-tenant data center properties. The Company’s data centers are generally purpose-built facilities with redundant power and cooling. The CyrusOne National IX Platform (the National IX Platform) delivers interconnection across states and between metro-enabled sites within its footprint and beyond. The Company has data centers in the United States, London and Singapore. As of December 31, 2016, the Company provided mission-critical data center facilities for 932 customers in 35 data centers and two recovery centers in 11 distinct markets (nine cities in the United States, London and Singapore) with approximately 3,904,000 net rentable square feet (NRSF). The Company provides round the clock security guard monitoring with customizable security features. As of December 31, 2016, the Company had approximately 1,657,000 NRSF under development.

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