Iron Mountain’s 8.2% dividend yield is compelling for a few investors but comes with risks. The organization remains confident of sustaining the existing dividend, but we’ll describe the top risks that investors should think about (such as for example financial obligation load, lack of development in its core storage business, and high capital strength).
Even though the company has brought some measures to counter these risks, it’s prudent for risk-averse investors to understand the tradeoff that is risk-reward. This report product reviews the ongoing health of this company, valuation, dangers, dividend safety, and concludes with our opinion about buying Iron hill.
Iron Mountain is just a REIT operating in the niche part of information retrieval and storage. It provides services such as storing records that are real information management, shredding services and more recently information center space for enterprise-class colocation and hyperscale deployments. IRM runs ~92 million square foot of storage space in almost 1,450 facilities based in around 50 nations. In total Iron Mountain acts more than 225,000 clients being worldwide including 95% of this Fortune 1000.
IRM boasts of its recurring and income that is durable driven mainly by its storage rental business which accounts for a majority ~63% of sales. The agreements that are leasing typically one to five years which gives income visibility. Also, IRM has limited income cyclicality offered the resilience of the storage leasing business during financial downturns. However, with physical storage businesses maturing in developed markets and clients transitioning to electronic, IRM also is trying to expand into greater development geographies and quicker companies that are growing such as data center).
Iron Mountain has made significant progress in moving its income mix to faster-growing organizations, including rising markets, data center, and adjacent company sections (entertainment and art work storage). The change in business mix has resulted in higher growth that is organic continued enhancement in adjusted EBITDA margins (as shown in figure below). Iron Mountain’s 8.2% dividend yield is compelling.