DigitalBridge Group's Steady Dividend Amid Growth: A Look at the Series J Preferred Stock

DigitalBridge Group, Inc. (NYSE: DBRG) has reaffirmed its commitment to income investors with the recent declaration of its 7.125% Series J Cumulative Redeemable Perpetual Preferred Stock (DBRG.PRJ) dividend. The $0.4453125 per-share quarterly payout, set to be distributed on July 15, 2025, aligns with the stock’s 7.125% annual yield, offering stability amid the company’s broader expansion in digital infrastructure. Let’s unpack the financials, risks, and opportunities behind this dividend-paying asset.

Dividend Details: Consistency in a Volatile Market

The declared dividend of $0.4453125 per share maintains the Series J Preferred Stock’s annualized yield of $1.78125, or 7.125%, as outlined in its prospectus. Shareholders of record as of July 10, 2025, will receive the payout, with the ex-dividend date likely falling on July 9, 2025 (the day before the record date). This marks the 30th consecutive dividend payment for the Series J stock since its 2018 inception, underscoring DigitalBridge’s reliability for income-focused investors.

Financial Fortitude: Growth in a Digital Infrastructure Boom

DigitalBridge’s dividend sustainability is tied to its diversified digital infrastructure portfolio, which includes data centers, fiber networks, and cell towers. Q1 2025 results highlighted:
- Revenue Growth: Total revenue rose 24% year-over-year to $45 million, driven by fee revenue from fundraising activities, including commitments to its flagship infrastructure fund.
- Distributable Earnings (DE): Soared 79% to $55 million, a critical metric for preferred stockholders, as DE directly funds dividend payments. Despite a GAAP net loss of $1 million (due to non-cash items), DE reflects the company’s ability to generate cash from its infrastructure assets.
- Strategic Acquisitions: Portfolio company Zayo’s $4.5 billion acquisition of Crown Castle’s fiber business expands its footprint in AI-driven connectivity, a sector with long-term demand.

Key Metrics to Watch

• Valuation: As of Q1 2025, DBRG.PRJ traded at a 3.2% discount to its $25 liquidation preference ($24.20/share), offering a 7.36% current yield. Historically, the stock often trades near or below liquidation value, making it attractive for discounted valuations.
• ETF Exposure: The common stock (DBRG) is held in 74 ETFs, with total ETF holdings valued at $316 million, signaling institutional confidence in the company’s long-term prospects.

Risks and Considerations

While DigitalBridge’s dividend appears secure, investors should note:
1. Macro Uncertainty: Trade policy shifts or market volatility could impact infrastructure projects. However, digital assets like data centers and fiber networks are considered “recession-resilient” due to their inelastic demand.
2. Regulatory Risks: As a REIT, DigitalBridge must comply with IRS qualification rules. A breach could disrupt dividend structures, though the company has maintained compliance thus far.
3. Leverage and Coverage: While distributable earnings cover preferred dividends, the company’s debt-to-equity ratio (not disclosed in recent updates) and fixed-charge coverage (historically weak in 2017) warrant monitoring.

Conclusion: A Steady Hand in Infrastructure Growth

DigitalBridge’s Series J Preferred Stock presents a compelling income opportunity. With a 7.36% yield and a dividend fully covered by distributable earnings, the stock offers stability for income portfolios. The company’s Q1 2025 results—particularly the 79% surge in DE—signal strong cash flow generation, while its focus on digital infrastructure (a $100 billion asset class) positions it to capitalize on secular trends like AI and 5G adoption.

While risks like regulatory shifts or economic downturns loom, DigitalBridge’s portfolio of long-term contracted assets and strategic acquisitions (e.g., Zayo’s fiber expansion) mitigate these concerns. For conservative income investors, DBRG.PRJ’s discounted valuation and consistent dividend history make it a standout pick in the preferred stock space.

Final Takeaway: DigitalBridge’s Series J Preferred Stock is a high-yield, low-risk play on the growth of digital infrastructure—a sector poised to thrive in the AI era. With a dividend safety net and institutional backing, it’s a buy for investors seeking income and resilience.