Screaming Strong Buy, 7.2% Yield, And 30% Upside For Iron Mountain

Co-produced with Jussi Askola and PendragonY for High Dividend Opportunities
The track record of a blue-chip… The price of a slowly dying business… This is the story of Iron Mountain (IRM), a storage REIT that is increasingly regarded as an endangered species due to the over-hype of new digital storage technologies.
Yet, despite the dropping share price, the company just reported solid results, hiked its dividend by another 4%, and everything points out to a striving business. Is this all just bluff right before an inevitable decline in business prospects?
Mr. Market is Getting it Wrong, We are Very Bullish
We firmly believe that the market is getting it wrong here because:
Storage is a much more defensive, sticky, and moated business than the market seems to understand. While it is undeniable that new technologies will lead to less demand for storage, the timing of this transition is overblown, and its impact is misunderstood. Less paper storage demand means less revenue from one segment, but more revenue from another for Iron Mountain. Every quarter that passes puts Iron Mountain one step closer to becoming a well-diversified storage company with data centers and a global reach. All in all, the company just hiked its dividend to new highs, so to argue that this is a dying business seems foolish to us. Priced at around $34 per share, Iron Mountain is a STRONG BUY among REITs heading into 2019, and we continue to build a larger position.

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