Critical Review: Manhattan Bridge Capital (NASDAQ:LOAN) & Digital Realty Trust (NYSE:DLR)

Manhattan Bridge Capital (NASDAQ:LOAN) and Digital Realty Trust (NYSE:DLR) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Dividends

Manhattan Bridge Capital pays an annual dividend of $0.46 per share and has a dividend yield of 8.6%. Digital Realty Trust pays an annual dividend of $4.88 per share and has a dividend yield of 3.0%. Manhattan Bridge Capital pays out 92.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Digital Realty Trust pays out 135.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Manhattan Bridge Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Manhattan Bridge Capital has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, Digital Realty Trust has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.

Earnings and Valuation

This table compares Manhattan Bridge Capital and Digital Realty Trust”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Manhattan Bridge Capital	$7.45 million	8.21	$5.48 million	$0.50	10.70
Digital Realty Trust	$5.46 billion	9.45	$948.84 million	$3.60	45.89

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Manhattan Bridge Capital and Digital Realty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Manhattan Bridge Capital	0	0	0	0	N/A
Digital Realty Trust	1	9	10	1	2.52

Digital Realty Trust has a consensus target price of $157.17, indicating a potential downside of 4.87%. Given Digital Realty Trust’s higher possible upside, analysts plainly believe Digital Realty Trust is more favorable than Manhattan Bridge Capital.

Profitability

This table compares Manhattan Bridge Capital and Digital Realty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Manhattan Bridge Capital	56.72%	13.20%	7.76%
Digital Realty Trust	20.58%	5.93%	2.61%

Institutional and Insider Ownership

21.8% of Manhattan Bridge Capital shares are held by institutional investors. Comparatively, 99.7% of Digital Realty Trust shares are held by institutional investors. 24.5% of Manhattan Bridge Capital shares are held by company insiders. Comparatively, 0.2% of Digital Realty Trust shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Digital Realty Trust beats Manhattan Bridge Capital on 10 of the 16 factors compared between the two stocks.

About Manhattan Bridge Capital

Manhattan Bridge Capital, Inc., a real estate finance company, originates, services, and manages a portfolio of first mortgage loans in the United States. The company offers short-term, secured, and non-banking loans to real estate investors to fund acquisition, renovation, rehabilitation, or development of residential or commercial properties. Its loans are secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was founded in 1989 and is headquartered in Great Neck, New York.

About Digital Realty Trust

Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation, and interconnection solutions. PlatformDIGITAL, the company's global data center platform, provides customers with a secure data meeting place and a proven Pervasive Datacenter Architecture (PDx) solution methodology for powering innovation and efficiently managing Data Gravity challenges. Digital Realty gives its customers access to the connected data communities that matter to them with a global data center footprint of 300+ facilities in 50+ metros across 25+ countries on six continents.