I recently wrote an article for Sure Dividend entitled “Consider Equity REITs for Your Next Investment“.In that article, I listed nine equity REITs (eREITs) for dividend investors to consider in light of the drubbing that eREIT valuations have recently taken due to fear of rising interest rates and to capitalize on the pass-through provision for REIT income included in the new tax legislation.Both of these topics are covered in some detail in the previous article.This article provides a more complete investment thesis for Iron Mountain, Inc. (IRM), one of the nine eREITs highlighted in the previous article.
Iron Mountain, Inc. Analysis
Iron Mountain, Inc. provides physical and digital document management, storage, and destruction services to both government and public/private corporations in the US and globally.Iron Mountain has an enterprise value of roughly $16B.Iron Mountain has been a public company since 1996 but officially converted the corporation to REIT status January 2015 though it had many attributes of a REIT in place prior to officially converting to a REIT.Converting to REIT status commits the company to paying out 90% of taxable income to shareholders and provides corporate tax benefits to the company.
While based in the US, IRM has operations in 45 countries on 6 continents and employs 24,000 people globally.Iron Mountain provides data protection, document storage, and destruction services to 95% of the companies in the Fortune 1000 list of companies.The chart below provides a good summary of IRM’s geographical footprint and its business.
Source: IRM Investor Website
Iron Mountain has a rather unique business with long term storage contracts for legacy documents.A significant fraction of corporate client documents are still in storage after 20 years.
Source: IRM Investor Website
These long term storage contracts provide a solid base of revenue and earnings for IRM on which to build.The chart below shows IRM’s total cubic feet of storage (stored boxes) continues to steadily grow.
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