NYSE:QTS

Stock Analysis Report

Executive Summary

QTS Realty Trust, Inc. (NYSE: QTS) is a leading provider of data center solutions across a diverse footprint spanning more than 6 million square feet of owned mega scale data center space throughout primarily North America and Europe.

Rewards

Trading at 50.3% below its fair value

Earnings are forecast to grow 50.17% per year

Became profitable this year

Risk Analysis

Unstable dividend track record

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Reasonable growth potential second-rate dividend payer.


Similar Companies

Share Price & News

How has QTS Realty Trust's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: QTS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.4%

QTS

0.8%

US REITs

-1.2%

US Market


1 Year Return

41.9%

QTS

17.3%

US REITs

22.3%

US Market

Return vs Industry: QTS exceeded the US REITs industry which returned 17.9% over the past year.

Return vs Market: QTS exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

QTSIndustryMarket
7 Day3.4%0.8%-1.2%
30 Day6.8%3.4%1.6%
90 Day5.3%1.5%8.8%
1 Year47.3%41.9%22.2%17.3%25.0%22.3%
3 Year29.7%16.4%38.0%20.6%49.9%40.3%
5 Year76.5%48.9%49.6%18.7%77.6%58.0%

Price Volatility Vs. Market

How volatile is QTS Realty Trust's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is QTS Realty Trust undervalued compared to its fair value and its price relative to the market?

45.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: QTS ($52.28) is trading below our estimate of fair value ($105.19)

Significantly Below Fair Value: QTS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: QTS is poor value based on its PE Ratio (480.5x) compared to the REITs industry average (37.8x).

PE vs Market: QTS is poor value based on its PE Ratio (480.5x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: QTS is poor value based on its PEG Ratio (9.6x)


Price to Book Ratio

PB vs Industry: QTS is overvalued based on its PB Ratio (3.2x) compared to the US REITs industry average (2x).


Next Steps

Future Growth

How is QTS Realty Trust forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

50.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: QTS's forecast earnings growth (50.2% per year) is above the savings rate (1.7%).

Earnings vs Market: QTS's earnings (50.2% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: QTS's revenue (10% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: QTS's revenue (10% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: QTS's Return on Equity is forecast to be low in 3 years time (0.9%).


Next Steps

Past Performance

How has QTS Realty Trust performed over the past 5 years?

-44.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: QTS has a large one-off gain of $8.6M impacting its September 30 2019 financial results.

Growing Profit Margin: QTS became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: QTS's earnings have declined by -44.9% per year over the past 5 years.

Accelerating Growth: QTS has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: QTS has become profitable in the last year, making it difficult to compare its past year earnings growth to the REITs industry (8.1%).


Return on Equity

High ROE: QTS's Return on Equity (2.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is QTS Realty Trust's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: QTS has a high level of physical assets or inventory.

Debt Coverage by Assets: QTS's debt is not covered by short term assets (assets are 0.1x debt).


Financial Institutions Analysis

Asset Level: QTS's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if QTS has a sufficient allowance for bad loans.

Low Risk Liabilities: QTS reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if QTS has an acceptable proportion of non-loan assets held.

Low Risk Deposits: QTS has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if QTS has an appropriate level of bad loans.


Next Steps

Dividend

What is QTS Realty Trust's current dividend yield, its reliability and sustainability?

3.08%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%1.4%markettop25%3.7%industryaverage3.6%forecastin3Years3.6%

Current dividend yield vs market & industry

Notable Dividend: QTS's dividend (3.37%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: QTS's dividend (3.37%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, QTS has been paying a dividend for less than 10 years.

Growing Dividend: QTS's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (79%), QTS's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: QTS's dividends in 3 years are forecast to be thoroughly covered by earnings (0.9% payout ratio).


Next Steps

Management

What is the CEO of QTS Realty Trust's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average management tenure


CEO

Chad Williams (48yo)

6.7yrs

Tenure

US$6,326,927

Compensation

Mr. Chad L. Williams has been the Chief Executive Officer, President and Chairman of QTS Realty Trust, Inc. since May 2013 and was the Chairman and Chief Executive Officer of predecessor of QTS Realty Trus ...


CEO Compensation Analysis

Compensation vs Market: Chad's total compensation ($USD6.33M) is about average for companies of similar size in the US market ($USD4.99M).

Compensation vs Earnings: Chad's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.8yrs

Average Tenure

51yo

Average Age

Experienced Management: QTS's management team is considered experienced (3.8 years average tenure).


Board Age and Tenure

6.4yrs

Average Tenure

66yo

Average Age

Experienced Board: QTS's board of directors are considered experienced (6.4 years average tenure).


Insider Trading

Insider Buying: QTS insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$2,519,69425 Nov 19
Jeffrey Berson
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares49,522
Max PriceUS$50.88
SellUS$45,56218 Nov 19
Mazen Al-Rawashdeh
EntityIndividual
Shares876
Max PriceUS$52.01
SellUS$180,97618 Nov 19
Peter Marino
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,521
Max PriceUS$51.40
SellUS$3,049,52413 Nov 19
Philip Trahanas
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares60,000
Max PriceUS$50.83
BuyUS$50,05007 Aug 19
Wayne Rehberger
EntityIndividual
Shares1,100
Max PriceUS$45.50
BuyUS$331,71931 May 19
Chad Williams
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares7,230
Max PriceUS$45.92
SellUS$253,01722 May 19
Jon Greaves
EntityIndividual
Role
Chief Technology Officer
Chief Technology Officer
Shares5,555
Max PriceUS$45.55

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.5%.


Management Team

  • Jon Greaves (47yo)

    Chief Technology Officer

    • Tenure: 3.8yrs
    • Compensation: US$1.59m
  • Chad Williams (48yo)

    Chairman

    • Tenure: 6.7yrs
    • Compensation: US$6.33m
  • Tag Greason

    Chief Hyperscale Officer

    • Tenure: 8.1yrs
  • Shirley Goza (62yo)

    General Counsel

    • Tenure: 6.3yrs
    • Compensation: US$1.44m
  • Jeff Berson (51yo)

    Chief Financial Officer

    • Tenure: 2.8yrs
    • Compensation: US$2.47m
  • Dave Stinson

    Executive Vice President of Sales

    • Steve Bloom (55yo)

      Chief People Officer

      • Tenure: 3.4yrs
      • Compensation: US$1.29m
    • Stephen Douglas

      Vice President of Finance & Investor Relations

      • Tenure: 5yrs
    • David McOmber

      Executive Vice President of Public Sector & Federal Sales

      • Tenure: 3.5yrs
    • David Robey (51yo)

      Chief Operating Officer

      • Tenure: 1.9yrs

    Board Members

    • Bill Grabe (81yo)

      Independent Director

      • Tenure: 6.4yrs
      • Compensation: US$220.01k
    • John Barter (72yo)

      Independent Director

      • Tenure: 6.4yrs
      • Compensation: US$225.00k
    • Phil Trahanas (48yo)

      Lead Independent Director

      • Tenure: 6yrs
      • Compensation: US$260.00k
    • Cathy Kinney (67yo)

      Independent Director

      • Tenure: 6.4yrs
      • Compensation: US$225.00k
    • Scott Miller (66yo)

      Independent Director

      • Tenure: 6.4yrs
      • Compensation: US$217.52k
    • Jamie Dos Santos (57yo)

      Member of Federal Advisory Board

      • Tenure: 2.1yrs
    • Peter Marino (77yo)

      Independent Director

      • Tenure: 6.4yrs
      • Compensation: US$217.52k
    • Chad Williams (48yo)

      Chairman

      • Tenure: 6.7yrs
      • Compensation: US$6.33m
    • Stephen Westhead (55yo)

      Independent Director

      • Tenure: 6.4yrs
      • Compensation: US$227.50k
    • Charles Barlow

      Member of Federal Advisory Board

      • Tenure: 2.1yrs

    Company Information

    QTS Realty Trust, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: QTS Realty Trust, Inc.
    • Ticker: QTS
    • Exchange: NYSE
    • Founded: 2013
    • Industry: Specialized REITs
    • Sector: Real Estate
    • Implied Market Cap: US$3.713b
    • Market Cap: US$3.332b
    • Shares outstanding: 64.90m
    • Website: https://www.qtsdatacenters.com

    Number of Employees


    Location

    • QTS Realty Trust, Inc.
    • 12851 Foster Street
    • Overland Park
    • Kansas
    • 66213
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    QTSNYSE (New York Stock Exchange)YesClass A Common Stock USUSDOct 2013
    QTS.PRANYSE (New York Stock Exchange)7.12% CUM PFD AUSUSDMar 2018
    QTS.PRBNYSE (New York Stock Exchange)6.50% CON PFD BUSUSDJun 2018

    Biography

    QTS Realty Trust, Inc. (NYSE: QTS) is a leading provider of data center solutions across a diverse footprint spanning more than 6 million square feet of owned mega scale data center space throughout primarily North America and Europe. Through its software-defined technology platform, QTS is able to deliver secure, compliant infrastructure solutions, robust connectivity and premium customer service to leading hyperscale technology companies, enterprises, and government entities. QTS owns, operates or manages 26 data centers and supports more than 1,100 customers primarily in North America and Europe. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/27 00:54
    End of Day Share Price2020/01/24 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.