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Iron Mountain: 9% Yield With Growth Prospects

Jun. 03, 2020 11:10 AM ETIron Mountain Incorporated (IRM)24 Comments
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Dividend Athlete


  • Iron Mountain currently pays a well-covered 9.3% yield.
  • The potential growth catalysts that drive AFFO growth can cause the market to value IRM at a higher multiple eventually.
  • IRM stock is still trading at a very attractive valuation after the rally.
  • I bought shares for my personal portfolio.

My Investing Approach

Due to my relatively short investing time horizon, I search mostly for higher-yielding stocks. As I intend to retire from professional sports around 2026, higher income-producing investments are a priority for me to achieve my retirement financial goals.

My full portfolio is available here.

Due to the sharp recovery rally, yields have been suppressed, and it's harder now to find strong companies with high dividend yields.

However, there are still pockets of opportunities for income investors to take advantage of.

Iron Mountain (NYSE:IRM) is my latest buy.

It has lagged the recent rally in spite of strong business performance and is still trading at an attractive valuation and a high 9.3% yield.


Iron Mountain is generating a lot of cash from its defensive Records Management business and is deploying that cash into faster-growing data center business segment. If successfully executed, this will accelerate the FFO growth and will help the company to lower its payout ratio from current level of 82% to "mid 60s - low 70s" as stated in the latest earnings call. This would further cement the safety of the generous dividend whilst providing growth and a possible revaluation of the company by the market to acknowledge the faster-growing data center segment.

The Company

Iron Mountain is somewhat of a unique REIT. They are in the business of storing records and managing information. From paper and digital documents/data to fine arts, they help securely store it for long periods. The company serves around 95% of the Fortune 1000 companies. This working relationship is crucial as they can cross-sell their services to existing customers. Especially now as they are aiming to becoming a serious player in the fast-growing data center business.

In total, the company has 225,000 customers in around 50 different countries and 50 different

This article was written by

Dividend Athlete profile picture
I am a professional athlete in my 20's, investing to create a passive income source for me and my family to live off once I retire from playing sports. I look for dividend growth opportunities globally. Articles are my opinions and do not constitute investment recommendations or advice.If you want to see my full portfolio, you can check it out at https://DividendAthlete.com

Analyst’s Disclosure: I am/we are long IRM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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