Daily Stock Pick: December 23rd, 2021

Investors were optimistic to kick off the final trading session of the holiday-shortened week.  Heping boost sentiment, a report showed that the variant of concern has a lower risk of hospitalization than past variants.  Reopening trades were in the green in early trading.  

With so much looming uncertainty for the market, investors have been seeking shelter among so-called “safety trades.”  Stocks with relatively low volatility that come along with a dependable payout can bring peace of mind during uncertain times.  Today we’ll focus on one such ticker.  


Boston-based, Information management services company Iron Mountain Inc. (IRM) provides information destruction, records management, and data backup and recovery services to more than 220,000 customers in 58 countries.  The company has around 1,500 leased warehouse spaces and underground storage facilities worldwide. 

As a testament to Iron Mountain’s leadership in its core storage business, the company serves 225,000 customers, which includes about 95% of the Fortune 1000 companies.  As for what the company stores, the wills of Princess Di and Charles Darwin housed in their facilities, as well as the original recordings of Frank Sinatra and Bill Gates’ Corbis photographic collection.   

The need for Iron Mountain’s physical facilities will likely never disappear. Still, as digital storage becomes more widely adopted, the company should continue to grow along with its global data-center business, which contributed 8% of adjusted earnings through the first three quarters of 2021.  The company and analyst community alike see the data center as a driver of steady growth in the coming years.  

During its Q3 earnings call, Iron Mountain blew past consensus expectations of $0.70 FFO (funds from offering) per share, reporting $0.90.  “Our Q3 performance demonstrates the continued strength of the business throughout the year, driven by our broad offerings, deep customer relationships, resilient business model, and strength of our team,” said CEO William Meaney. “Our Mountaineers have been executing well despite what continues to be a challenging environment, and we are pleased to continue to drive accelerated growth with continued strong uptake in our digital and SITAD offerings resulting in 19% year over year growth, strong storage growth of 3.2% with positive organic volume, and continued momentum in our Data Center business, which is well on track to deliver bookings in excess of 30 megawatts for the year.”

Iron Mountain forecasts that revenue this year will increase 7.5% from 2020 to about $4.47 billion.  And the company also believes that its AFFO per share for this year will surge 10% from the previous year to about $3.39.  Based on that projection, the payout ratio for its 5% dividend yield will be around 73% which allows the company to retain the capital necessary to expand its data-center business even as it rewards shareholders.

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But you have to act now, because a catalyst coming in a few weeks is set to take this company mainstream... And by then, it could be too late.

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