Duke Realty (NYSE:DRE) has enjoyed tremendous benefits from the e-commerce boom. The Indianapolis-based real estate investment trust (REIT) continues to lease more space as online shopping has increased the demand for warehouse space.

Now, as the company faces a high valuation, investors must look at whether DRE stock stands as an effective way to play the growth in e-commerce under the safer, dividend-paying umbrella of industrial real estate. Given the valuation and the dividend yield, DRE appears to deliver average performance at an above-average multiple.

DRE Stock Benefiting From E-commerce

Few can question DRE’s growth over the last decade. It fell to just above $4 per share following the financial crisis. However, Duke has enjoyed a sustained recovery since. It now trades at around $29 per share, an increase of more than seven-fold since 2009.

The company also stands in a strong position from a location and growth standpoint. Duke owns more than 149 million square feet of rentable space in 20 major U.S. logistics markets. In fact, Amazon.com (NASDAQ:AMZN), who leases much of Duke’s space, has placed most of Duke’s markets on its short list for HQ2. Hence, DRE stock will likely benefit regardless of the location Amazon chooses.

Tenants occupy almost all of the space currently owned by the REIT. Hence, Duke is breaking ground on new facilities. In the last month, the company has announced the construction of additional space in the Chicago, Cincinnati, Dallas and Southern California markets. It also quickly leased spaced it recently purchased in New Jersey.

Average Growth at a High Multiple

Unfortunately, the success of Duke has made DRE stock a less compelling buy. The current price takes the price-to-earnings (P/E) ratio to about 23. Considering net income based on the NAREIT funds from operation (FFO) income standard, Duke Realty reported $1.27 in FFO for 2017.

Still, this compares less favorably to peers such as First Industrial Realty Trust (NYSE:FR), Plymouth Industrial REIT (NYSEAMERICAN:PLYM) or Prologis (NYSE:PLD). The average P/E for industrial REITs stands at just under 13.4. The average for all REITs is about 14.2, making DRE stock among the more expensive in its class.

That P/E will not bring with it compelling growth numbers. Analysts expect $1.30 per share in FFO earnings in 2018 and $1.39 per share in 2019. While that still brings steady, single-digit growth, it will not serve as the type of growth that will justify a 23 P/E ratio.

The dividend yield will also leave investors wanting. Equity REITs pay an average dividend yield of 4.11%. The yield for DRE stock comes in at only about 3.1% when considering its current quarterly dividend of 20 cents per share.

However, like last year, the company will probably have to issue a special dividend to meet the minimum dividend requirement for REITs. If the $1.30 per share in FFO income holds, Duke will have to pay $1.17 per share in yearly dividends. This would bring the yield closer to 4%, but that still falls short of industry averages.

Final Thoughts on DRE Stock

Although DRE stock should continue to perform well for the foreseeable future, the equity will likely deliver an average performance at an above-average cost.

As a company, Duke Realty fires on all cylinders. The firm has leased out almost all its 149 million square feet of space and continues to build more to meet demand. Moreover, it happens to operate in most of the markets Amazon is considering for its new headquarters.

The inescapable factor with DRE stock hinges on its multiple. Few industrial REITs support a higher P/E ratio. The contest between Duke and market leader Prologis on the largest dividend yield remains close. However, PLD stock enjoys a lower P/E and a higher growth rate.

Duke Realty and its stock will continue to prosper and benefit investors in this environment. However, investors seeking both value and growth might earn higher returns in a different industrial REIT.

As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting.