In order to join the Dividend Aristocrats, a stock must be a member of the S&P 500 index and increase its dividend for at least 25 consecutive years, and as you might imagine, this is a pretty exclusive club.

Data center real estate investment trust (REIT) Digital Realty Trust (DLR -0.77%) is not a Dividend Aristocrat. It has only increased its payout for 17 years in a row, but that's because it has only been a publicly traded company since 2004. Digital Realty has an excellent history of growing its cash flow and delivering shareholder returns and will likely become a Dividend Aristocrat as soon as it's old enough.

A stellar track record of performance

If you aren't familiar with data centers, think of them as the physical homes of the internet. Every time you upload photos to social media, access a cloud-based software program, or visit a website, all of that information has to physically live somewhere. And that's where data centers come in. Data centers provide a secure and reliable place for companies to house their servers and other networking equipment.

Digital Realty is one of the largest data center operators in the world and has benefited tremendously from the growth of the cloud over the past decade and a half. Companies such as International Business Machines, Oracle, and Meta Platforms are among Digital Realty's top customers, but thousands of businesses rely on its data center solutions.

As mentioned, Digital Realty went public in 2004. And since that time, the company's track record has been fantastic, both from an income and a growth perspective. For one thing, not only has Digital Realty increased its dividend for 17 consecutive years, but it has done so at a 10% annualized rate. Since 2004, Digital Realty's dividend has increased by 388%.

Not only that, but due to smart capital allocation, Digital Realty has delivered stellar total returns for investors. Even after its recent slump, Digital Realty has produced an 1,800% total return since its initial public offering -- nearly four times the total return of the S&P 500.

Don't pay too much attention to short-sellers

Data center REITs, and Digital Realty in particular, have been the targets of short-sellers recently, and this has weighed on their stock prices. Most notably, Jim Chanos (who correctly predicted the Enron collapse) recently called data centers his "big short" idea, essentially saying that tech companies are gradually going to handle more of their data center needs internally, shrinking Digital Realty's customer base.

To put it mildly, I don't buy it. Building out and maintaining data centers is a capital-intensive operation that simply isn't desirable for most growth-focused technology businesses. And the long-term demand for data centers should continue to grow, with the continued rollout of 5G technology and many data-heavy tech trends like augmented reality and autonomous vehicles still in the early stages.

Digital Realty's latest results show that the business is doing well and that demand for data center space remains very strong. In fact, during the quarter, Digital Realty achieved an all-time high for bookings, with new leases representing $176 million in new annual rent as well as $156 million in renewal leases.

Lots of room to grow the dividend

Growth aside, it's also worth noting that Digital Realty is expecting $6.70 to $6.75 in core funds from operations (FFO -- the REIT equivalent of earnings) in 2022. With the current dividend representing about 73% of that, a somewhat low payout ratio for a REIT, there's room to grow the dividend based on current profitability.

Digital Realty needs to increase its dividend for another eight consecutive years in order to qualify as a Dividend Aristocrat. And I'd be very surprised if it didn't get there.