Since DuPont Fabros (NYSE:DFT) have released their results for the third quarter, their share price has risen almost 7 percent. Although their rates of cash flow and dividend growth have remained largely unchanged from Q2, good news helped improve the stock price performance.
The company ‘replaced’ a bankrupt customer, and the market has reacted well to this. In addition, its CEO Christopher Eldredge has helped the company to reach their goals for the year, and this is another factor that may have had an influence on how the market has reacted to these results. In the end, their outlook for 2015 FFO per share has been increased by a few cents.
However, in the data center sector, DuPont has not been our top choice as they have trailed behind other companies in terms of the potential that they have to generate dividends. Specifically, DuPont fell behind their peers in terms of the growth of their cash flow on a per-share basis.
This does not mean that DuPont is a bad REIT performer, even though they have been outperformed within the sector. Data centers have been doing well overall. It is currently a top performing REIT sector, and its group of stocks has returned 28 percent so far this year.
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Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.