Iron Mountain Inc (IRM): A Comprehensive Analysis of Its Dividend Performance
Unraveling the Dividend History, Growth, and Sustainability of Iron Mountain Inc
Iron Mountain Inc(NYSE:IRM) recently announced a dividend of $0.65 per share, payable on 2023-10-05, with the ex-dividend date set for 2023-09-14. As investors anticipate this forthcoming payment, attention also turns to the company's dividend history, yield, and growth rates. With data from GuruFocus, we delve into Iron Mountain Inc's dividend performance and evaluate its sustainability.
What Does Iron Mountain Inc Do?
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Iron Mountain Inc is a provider of record management services. As a REIT, most of its revenue is derived from its storage business, with the remainder coming from value-added services. The firm primarily serves enterprise clients in developed markets. Its business segments encompass Global RIM Business; Global Data Center Business; and Corporate and Other Business.
A Glimpse at Iron Mountain Inc's Dividend History
Iron Mountain Inc has maintained a consistent dividend payment record since 2010, with dividends currently distributed on a quarterly basis. Iron Mountain Inc has increased its dividend each year since 2010, earning it the status of a dividend achiever, a distinction attributed to companies that have increased their dividend each year for at least the past 13 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Iron Mountain Inc's Dividend Yield and Growth
As of today, Iron Mountain Inc currently has a 12-month trailing dividend yield of 3.93% and a 12-month forward dividend yield of 4.12%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Iron Mountain Inc's annual dividend growth rate was 0.30%. Extended to a five-year horizon, this rate increased to 1.80% per year. Over the past decade, Iron Mountain Inc's annual dividends per share growth rate stands at 9.30%. Based on Iron Mountain Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Iron Mountain Inc stock as of today is approximately 4.30%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Iron Mountain Inc's dividend payout ratio is 1.92. This may suggest that the company's dividend may not be sustainable.
Iron Mountain Inc's profitability rank, as of 2023-06-30, is 7 out of 10, suggesting good profitability prospects. The company has reported positive net income each year over the past decade, further reinforcing its high profitability.
Growth Metrics: The Future Outlook
Iron Mountain Inc's growth rank of 7 out of 10 suggests a good growth trajectory relative to its competitors. Iron Mountain Inc's revenue per share and 3-year revenue growth rate indicate a robust revenue model. The company's revenue has increased by approximately 5.60% per year on average, outperforming approximately 71.09% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Iron Mountain Inc's earnings increased by approximately 26.90% per year on average, outperforming approximately 77.73% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 19.10%, outperforms approximately 78.62% of global competitors.
Conclusion
In conclusion, while Iron Mountain Inc's consistent dividend payments and growth rate are commendable, its high payout ratio raises concerns about the sustainability of its dividends. However, its strong profitability and growth metrics suggest a solid financial footing. Investors should keep an eye on these factors while considering Iron Mountain Inc as a potential dividend stock. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
