Only 1 of These 2 Data Center REITs Keeps Raising Its Dividend. Here’s Which Belongs in Your Roth IRA.

Only 1 of These 2 Data Center REITs Keeps Raising Its Dividend. Here’s Which Belongs in Your Roth IRA.

Trey Thoelcke

Mon, September 14, 2026 at 6:10 PM GMT+3 5 min read

• DLR -2.76%
• EQIX -2.15%

Quick Read

• Equinix has raised its dividend 11 consecutive years to $5.16 quarterly, while Digital Realty has held flat at $1.22 since March 2022.

• Inside a Roth IRA, REIT dividends escape ordinary income tax entirely, making Equinix's 10% annual payout growth far more powerful over decades.

• Equinix guides 11% to 13% AFFO per share growth in 2026 and 10% to 13% revenue growth through 2029, extending its compounding runway well beyond Digital Realty's outlook.

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For a retirement-focused investor deciding between Digital Realty Trust (NYSE:DLR) and Equinix (NASDAQ:EQIX), the two largest publicly traded data center REITs, the question is which one belongs inside a Roth IRA right now. The differentiator is the payout trajectory. Equinix just declared its 11th consecutive annual increase, lifting the quarterly dividend to $5.16. Digital Realty has held its quarterly payout at $1.22 for every ex-dividend date from March 2022 through September 15, 2026, with the last raise coming in 2022. Inside a decades-long account, that divergence matters more than almost anywhere else.

Why the Roth Wrapper Changes the Math

Real estate investment trust (REIT) distributions are generally taxed as ordinary income rather than at the lower qualified-dividend rate that applies to most common stocks. A Roth IRA eliminates that drag entirely: qualified withdrawals come out untaxed, and every reinvested dividend compounds free of federal tax for the life of the account. Both trade as modest-yield names. Digital Realty yields 2.6% and Equinix currently yields 2.0%. The Roth case here centers on which payout stream, reinvested and untaxed for 20 or 30 years, ends up larger.

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Dimension 1: Dividend Growth

Equinix's quarterly dividend has risen from $3.10 throughout 2022, to $3.41 in early 2023, to $4.26 later that year, to $4.69 across 2025, and to $5.16 in 2026. Digital Realty's increased from $1.16 in 2021 to $1.22 in March 2022, then stayed there.

Management on Equinix's Q2 2026 call explicitly linked the future path of the payout to cash generation: "dividend growth to approximate AFFO per share growth," with long-term adjusted funds from operations (AFFO) per share guided to grow 9% to 12% annually. Digital Realty's Q2 2026 call, by contrast, contained no dividend-policy commentary at all. For a Roth, a compounding payout beats a static one every time.

Winner: Equinix.

Dimension 2: Growth Trajectory

Both REITs are riding the AI infrastructure wave (and the power, cooling, and networking suppliers feeding those halls are their own trade, one we mapped in a free report on seven AI infrastructure names), but Equinix is guiding higher and executing faster. Q2 2026 revenue reached $2.625 billion, up 16.4% year over year, with adjusted EBITDA margin of 53% and a record 9,700 net interconnections added. Full-year 2026 AFFO per share is guided to $42.69 to $43.29, or 11% to 13% growth.

Digital Realty's Q1 2026 revenue was $1.64 billion, up 16.2% year over year, with core FFO per share of $2.04, up 15%, and full-year core FFO guided to $8.00 to $8.10. Near-term growth is comparable, but Equinix's 2027–2029 outlook of 10% to 13% revenue growth and 9% to 12% AFFO per share growth extends the compounding runway further.

Winner: Equinix.

Dimension 3: Total Return and Valuation

The return windows split. Equinix is ahead year to date at +36.68% versus Digital Realty at +27.48%, and over one year Equinix leads +32.11% to +14.61%. Over five years, Digital Realty leads at +48.64% against Equinix at +34.98%.

On valuation, Digital Realty trades at a lower price-to-book of 2.6 versus Equinix at 7.1, and analyst targets imply more upside for Digital Realty ($223.48 target against a $186.13 current price) than for Equinix ($1,233.23 target against $1,027.53). Value-tilted buyers get the edge with Digital Realty.

Winner: Digital Realty, narrowly.

Verdict: Equinix Belongs in the Roth

The Roth is a compounding account, and the single variable that matters most inside it is the trajectory of reinvested cash flows. Equinix is raising its payout by 10% annually with management publicly committing to keep that pace tied to double-digit AFFO growth through 2029. Digital Realty has paid the same $1.22 quarterly for four straight years while directing incremental cash into a $20 billion development pipeline and private-capital acquisitions. That may reward its book value over time, and a value-oriented income investor holding it in a taxable account and seeking the higher 2.6% yield can make a case. For the Roth specifically, Equinix is the more attractive option.

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