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Key Reasons to Add Iron Mountain Stock to Your Portfolio Now
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Iron Mountain Incorporated (IRM - Free Report) is well-poised to benefit from strong cash flows in the storage and records management business. Its accretive buyouts and expansion efforts toward fast-growing businesses, such as the data center, bode well for growth. A healthy balance sheet will likely support the company’s growth endeavors over the long term.
Last month, this Boston, MA-based real estate investment trust (REIT) company reported first-quarter 2025 adjusted funds from operations (AFFO) per share of $1.17, beating the Zacks Consensus Estimate of $1.16. Results reflected solid performances across all segments, including the storage, service, global RIM and data center business.
Shares of this Zacks Rank #2 (Buy) company have rallied 21.1% over the past month, outperforming its industry's growth of 12.5%. Given the strength in its fundamentals, there seems to be additional room for growth of this stock.
Image Source: Zacks Investment Research
Factors That Make Iron Mountain a Solid Pick
Business Model: IRM has a stable and resilient core storage and records management business. It derives the majority of its revenues from fixed periodic (usually earned on a monthly basis) storage rental fees charged to customers based on the volume of their records stored. This assures a steady stream of recurring revenues for the company. In the first quarter of 2025, Iron Mountain’s organic storage rental revenues increased 8.8% from the prior-year quarter.
Expansion Efforts: This REIT has been expanding its fast-growing businesses, especially the data center segment, to supplement its storage segment performance. In February 2025, in a strategic partnership with Ooredoo Group, Iron Mountain announced it would take a minority equity stake in Ooredoo’s carrier-neutral data center company, MENA Digital Hub.
Given the strong demand for connectivity, interconnection and colocation space, demand for data centers is likely to rise in the coming years, positioning this segment well for growth. In the first quarter of 2025, the company attained data center revenue growth of 20.3%. Driven by IRM's strong pipeline, management expects to lease 125 megawatts for 2025.
Diverse Tenant Base: Iron Mountain’s diversified tenant and revenue base is a positive. The company serves more than 240,000 clients across different industries and geographical locations. Most importantly, no single customer accounted for more than 1% of its revenues in 2024, which reflects a well-diversified revenue generation base.
Balance Sheet Strength & Cash Flow: Iron Mountain maintains a healthy balance sheet position with ample financial flexibility to meet its near-term debt obligations and other capital commitments while pursuing growth opportunities. As of March 31, 2025, it had $2.1 billion of total liquidity. The company ended the first quarter of 2025 with a net lease-adjusted leverage of 5.0X, the lowest level since its REIT conversion in 2014. Such a strong financial footing is likely to support its growth endeavors in the future.
Dividend Distribution: Solid dividend payouts are arguably the biggest enticements for REIT shareholders, and Iron Mountain remains committed to that. In February 2025, concurrent with its fourth-quarter 2024 earnings release, it announced a 10.6% hike in its cash dividend to 78.5 cents per share from 71.5 cents paid out earlier. Given its healthy operating platform and solid financial position, the increased dividend is likely to be sustainable in the forthcoming period.
The Zacks Consensus Estimate for VICI Properties’ 2025 FFO per share is pinned at $2.34, indicating year-over-year growth of 3.5%.
The Zacks Consensus Estimate for W.P. Carey’s 2025 FFO per share stands at $4.88, indicating an increase of 3.8% from the year-ago reported figure.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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Key Reasons to Add Iron Mountain Stock to Your Portfolio Now
Iron Mountain Incorporated (IRM - Free Report) is well-poised to benefit from strong cash flows in the storage and records management business. Its accretive buyouts and expansion efforts toward fast-growing businesses, such as the data center, bode well for growth. A healthy balance sheet will likely support the company’s growth endeavors over the long term.
Last month, this Boston, MA-based real estate investment trust (REIT) company reported first-quarter 2025 adjusted funds from operations (AFFO) per share of $1.17, beating the Zacks Consensus Estimate of $1.16. Results reflected solid performances across all segments, including the storage, service, global RIM and data center business.
Shares of this Zacks Rank #2 (Buy) company have rallied 21.1% over the past month, outperforming its industry's growth of 12.5%. Given the strength in its fundamentals, there seems to be additional room for growth of this stock.
Image Source: Zacks Investment Research
Factors That Make Iron Mountain a Solid Pick
Business Model: IRM has a stable and resilient core storage and records management business. It derives the majority of its revenues from fixed periodic (usually earned on a monthly basis) storage rental fees charged to customers based on the volume of their records stored. This assures a steady stream of recurring revenues for the company. In the first quarter of 2025, Iron Mountain’s organic storage rental revenues increased 8.8% from the prior-year quarter.
Expansion Efforts: This REIT has been expanding its fast-growing businesses, especially the data center segment, to supplement its storage segment performance. In February 2025, in a strategic partnership with Ooredoo Group, Iron Mountain announced it would take a minority equity stake in Ooredoo’s carrier-neutral data center company, MENA Digital Hub.
Given the strong demand for connectivity, interconnection and colocation space, demand for data centers is likely to rise in the coming years, positioning this segment well for growth. In the first quarter of 2025, the company attained data center revenue growth of 20.3%. Driven by IRM's strong pipeline, management expects to lease 125 megawatts for 2025.
Diverse Tenant Base: Iron Mountain’s diversified tenant and revenue base is a positive. The company serves more than 240,000 clients across different industries and geographical locations. Most importantly, no single customer accounted for more than 1% of its revenues in 2024, which reflects a well-diversified revenue generation base.
Balance Sheet Strength & Cash Flow: Iron Mountain maintains a healthy balance sheet position with ample financial flexibility to meet its near-term debt obligations and other capital commitments while pursuing growth opportunities. As of March 31, 2025, it had $2.1 billion of total liquidity. The company ended the first quarter of 2025 with a net lease-adjusted leverage of 5.0X, the lowest level since its REIT conversion in 2014. Such a strong financial footing is likely to support its growth endeavors in the future.
Dividend Distribution: Solid dividend payouts are arguably the biggest enticements for REIT shareholders, and Iron Mountain remains committed to that. In February 2025, concurrent with its fourth-quarter 2024 earnings release, it announced a 10.6% hike in its cash dividend to 78.5 cents per share from 71.5 cents paid out earlier. Given its healthy operating platform and solid financial position, the increased dividend is likely to be sustainable in the forthcoming period.
Other Stocks to Consider
Some other top-ranked stocks from the broader REIT sector are VICI Properties (VICI - Free Report) and W.P. Carey (WPC - Free Report) , each carrying a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for VICI Properties’ 2025 FFO per share is pinned at $2.34, indicating year-over-year growth of 3.5%.
The Zacks Consensus Estimate for W.P. Carey’s 2025 FFO per share stands at $4.88, indicating an increase of 3.8% from the year-ago reported figure.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.