Iron Mountain Offers Eight Annual Dividend Hikes, 6.4% Yield (IRM)
By: Ned Piplovic,
Iron Mountain Incorporated (NYSE:IRM) has offered its shareholders annual dividend hikes every year since the company started distributing dividends in 2010.
In addition to its regular distributions and annual dividend hikes, the company also distributed four special dividend distributions and two stock dividends over the past eight years. While the share price encountered a higher degree of volatility since the 2008 financial crisis, the long-term trend is still upwards. Therefore, the periodic share price pullbacks could be opportunities for investors to add IRM shares to their portfolio at discounted prices.
Investors convinced that the share price will continue its current recovery and bounce back should complete their own due diligence to confirm whether the IRM stock fits within their own portfolio strategy and timeline. To insure eligibility for the next round of dividend distributions on the October 2, 2018, pay date, interested investors must take a position in the company’s stock ahead of the next ex-dividend date on September 14, 2018.
Iron Mountain Incorporated (NYSE:IRM)
Headquartered in Boston, Massachusetts, and founded in 1951, Iron Mountain Incorporated (NYSE: IRM) is an American enterprise information management services company. The company stores and protects billions of valued assets, including critical business information and highly sensitive data, as well as cultural and historical artifacts. Iron Mountain uses its network of more than 1,400 facilities in over 50 countries with approximately 85 million square feet of storage space to manage and store information and high-value assets for more than 225,000 organizations around the world, including 95% of the Fortune 1000 companies. Among its services, Iron Mountain offers information management, digital transformation, secure storage, secure destruction, as well as data centers, cloud services and art storage and logistics. The company also assists customers with cost and risk reduction, regulation compliance, disaster recovery and implementation of digital work environments.
The company’s share price has been rising steadily since its initial public offering (IPO) in 1997, albeit with more volatility since 2008. Since the IPO, the company’s share has advanced more than 13-fold. After a small initial increase at the onset of the trailing 12-month period, the share price reached $41.44 on November 24, 2017, which was a new all-time high.
However, after a year-long uptrend, the share price dropped 25% towards its 52-week low of $30.89 on March 23, 2018. Since bottoming out in March, the share price has regained more than half of its most recent losses and closed on September 5, 2018, at $36.54. While this closing price was almost 12% below the November 2017 peak and nearly 7% lower than it was one year earlier, its was 18.3% above its March low and almost 50% higher than it was five years ago.
Additionally, after falling below the 200-day moving average (MA) in February 2018, the 50-day MA has crossed back above the 200-day MA on August 20, 2018, and IRM’s share price has been securely above both moving averages since mid-August. These technical indicators suggest that the current uptrend might have more room on the upside to continue its rise over the next couple of periods.
Iron Mountain’s current $0.5875 quarterly dividend amount is 6.8% higher than the $0.55 quarterly dividend distribution from the same period of last year. This new quarterly dividend amount is equivalent to a $2.35 annualized payout and yields 6.4%. While the share price decline suppressed the current dividend yield 8.1% below the company’s own five-year average yield, IRM’s current yield is 230% higher than the 1.93% average yield of the entire Services sector. Additionally, IRM’s current yield is also more than fourfold higher than the 1.56% simple average yield of all the companies in the Business Services industry segment and triple the 2.16% average yield of the segment’s dividend-paying companies.
Since initiating dividend distributions in 2010, Iron Mountain enhanced its total annual dividend payout amount 840%, which corresponds to an average growth rate of more than 32% per year. The recent share price decline erased any gains from dividend hikes and delivered a marginal 0.3% total loss over the past 12 months. However, if the share price recovers to reach new highs as it has done consistently over the past decade, total returns could revert soon to levels similar to the current 53% total return over the past three years or the 96% total return over the past five years.
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