Another Lifetime High Following 20% Dividend Hike By This Data Center REIT

The Holy Grail for REIT investors is accretive growth which can be used to fund increases in dividends distributed to shareholders. Clearly the mutually beneficial relationship between data center landlord DuPont Fabros Technology Inc.

and investment grade clients such as Verizon

is paying off big time for shareholders.

On December 2, DuPont Fabros announced that it is increasing its quarterly dividend for the fifth time in 11 quarters. The DFT quarterly dividend was increased by 20 percent from $0.35 to $0.42 per share. Based upon the $33.49 closing price on December 4, this represents a 5 percent forward yield for investors. Most Recent Verizon Expansion On December 4, DuPont Fabros announced that Verizon Enterprise Solutions had taken space in the company's new 446,000 gross SF ACC 7 data center located at the company's 1.6 million SF Ashburn, Virginia campus.

Verizon leases space at all four DuPont locations, and the new lease in Virginia is an expansion at that campus. Verizon provides DFT's customers with a variety of enterprise-class networking services, including Private IP, public Internet, Ethernet and wavelength services. What Is Behind DFT's Outstanding Performance? DuPont Fabros is focused on serving investment grade enterprise customers.

These valuable relationships have resulted in repeat business from many of the largest and fastest growing data driven companies including many of the Internet "blue-chips."

The triple-net lease business model that DuPont Fabros utilizes results in dependable cash-flow which is easy for analysts to model and investors to understand.

The cost of upgrades and replacements, governmental compliance and most expenditures other than those related to the roof, structural walls and foundation are charged back to tenants on a straight-line basis over the term of the lease. DuPont Fabros estimates that of ~$3 million in cap-ex spent in 2014, about 95 percent will be recovered from tenants. How Does DuPont Fabros Stack Up YTD?

Cyrus One Inc.

is a REIT peer which also derives ~75 percent of its revenues from enterprise customers. Approximately 30 percent of Cyrus One revenue is derived from the oil and gas vertical market. This may be one reason why its shares have lagged behind DuPont Fabros during the past year. • http://www.benzinga.com/news/14/11/5001525/how-these-3-data-center-providers-stand-apart Digital Realty Trust Inc.

has been the top data center REIT performers YTD. While Digital Realty has many wholesale and enterprise customers like DuPont Fabros, its 131 data centers located on four continents depend more on multi-national requirements and network connectivity to serve over 650 customers globally. Likewise, QTS Realty Trust

is more focused on network connectivity than DuPont Fabros, serving over 850 customers. QTS has several large mega-data center campuses which can accommodate large wholesale customers, but for the most part this data center REIT is more focused on connectivity, hybrid and cloud solutions, rather than competing for large wholesale enterprise customers. The Big Picture Data center REITs are a way for investors to cash in from the exponential growth from big data and cloud computing trends without having to place a bet on a particular vendor, software solution, or IT platform.

The great news for investors is that there is plenty of room for more than one winner in the data center REIT space.