Last week, we tossed out a poll — asked you all which stock to dive into next, and the crowd spoke. Drumroll, please… Iron Mountain (NYSE: IRM) came out on top. It’s this real estate investment trust thing, or REIT, all about data management and storage. Not exactly rock climbing, but hey, mountains are cool, right?
Let’s chat dividends. They’re handing out $0.785 per share every quarter. That’s, like, a 3.2% yield. So, the million-dollar question (or maybe a bit less) — is that dividend safe, or is it time to rope down and find another mountain?
Because Iron Mountain’s a REIT, we gotta talk adjusted funds from operations (AFFO). It’s basically how we peek at their cash flow. It’s been on the up and up over the years. In 2024, their AFFO hit $1.3 billion, a tick up from $1.2 billion in 2023. This year? They’re aiming for $1.5 billion. Not too shabby.
Now, most companies, I’d want them to keep payouts to, like, 75% of their cash flow max. But REITs? They’re in a different ballpark. They’ve gotta dole out 90% of their earnings in dividends by law. Weird, right? So yeah, their payout ratios are usually heftier.
In 2024, Iron Mountain was generous, giving shareholders 59% of its AFFO in dividends. Predictions say it might slim down to 54% this year. As long as they keep it below 100%, no sweat here.
Oh, and get this — they have a solid history with payments too. Started the whole dividend parade back in 2010. Every year, there’s a little extra in your pocket, minus the whole 2020-2022 pandemic glitch. But c’mon, who didn’t have a glitch those years?
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So, Iron Mountain might not be the king of the yield hill, but it’s a steady climber. With cash flow rising and dividends following suit (unless another pandemic rolls in!), they’re not really at risk of slashing that dividend anytime soon.
Grade? A solid A for safety.
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Got another stock you want me to throw under the magnifying glass? Drop it in the comments.
By the way, if you’re curious, you can search for your fave stocks on Wealthy Retirement. Hit “Search” — top right on the homepage, name your stock, and off you go.
Just a heads-up, though, our Safety Net stuff focuses on individual stocks. No ETFs, mutual funds, or any of that jazz.
