Key Reasons to Add Iron Mountain Stock to Your Portfolio Now

Iron Mountain Incorporated IRM 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 is likely to support the company’s growth endeavors over the long term.

Over the past three months, shares of this Zacks Rank #2 (Buy) company have declined 13.5% against the S&P 500 composite’s increase of 5.8%. However, the Zacks Consensus Estimate for 2025 and 2026 funds from operations per share has moved higher over the past months to $5.13 and $5.69, calling for considerable year-over-year growth.

Given the strength of its fundamentals, this stock seems to have additional room for growth.

Factors That Make Iron Mountain a Solid Pick

Business Model: Iron Mountain enjoys a steady stream of recurring revenues from its core storage and records management businesses. The company 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. Its retention rate for its records management business was 93.2% in the third quarter of 2025. Iron Mountain’s organic storage rental revenues increased 9.4% year over year in the third quarter of 2025. 

Iron Mountain is supplementing its storage segment’s performance with expansion in its faster-growing businesses, most notable being the data center segment. It is making organic growth efforts along with expansion projects and developments. In the third quarter of 2025, the company attained data center revenue growth of 33% year over year. IRM had a total data center operating portfolio of 452 MW, which was 97% leased. 

The company expects to nearly triple its capacity to 1.3 GW once fully developed. For 2025, management expects Data Center revenue growth of approximately 30%. Based on robust data center industry demand and its currently signed leases, the company expects more than 25% growth in 2026.

IRM is also leveraging the highly fragmented, growing $30 billion Asset Lifecycle Management (“ALM”) market. The company expects its ALM business to generate about $600 million in revenues in 2025. It sees a solid opportunity across both the enterprise and data center decommissioning markets with low capital investment requirements. 

Diverse Tenant Base: Iron Mountain’s diversified tenant and revenue base is a positive. The company serves more than 240,000 customers in 61 countries across different industries and geographical locations.  In September 2022, Iron Mountain launched Project Matterhorn, aiming to capture a higher share of the large, global addressable markets by investing 16% of its revenues (roughly $4 billion) over the next four years to accelerate its growth. The program will help the company shift from a product-based to a solution-based sales approach to better serve its customers’ needs. It will also aid in establishing a global operating model that is designed to help optimize the company’s shared services and best practices.

Balance Sheet Strength: Iron Mountain maintains a strong balance sheet position. It had a weighted-average maturity of 4.6 years as of Sept. 30, 2025. With this, it has ample financial flexibility to meet its near-term debt obligations and other capital commitments while pursuing growth opportunities. Iron Mountain ended the third quarter of 2025 with a net lease-adjusted leverage of 5.0X. The company’s target long-term net lease-adjusted leverage ratio is between 4.5 and 5.5. It has been at 5.0 for nearly two years.

Dividend Distribution: Solid dividend payouts are arguably the biggest enticements for REIT shareholders, and Iron Mountain remains committed to that. In November 2025, concurrent with its third-quarter 2025 earnings release, it announced a 10% hike in its cash dividend to 86.4 cents per share from 78.5 cents paid out earlier. This marked the fourth consecutive year of dividend hike and the third consecutive year with a 10% increase. 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 Prologis PLD and First Industrial Realty Trust FR. Both Prologis and First Industrial Realty Trust carry 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 Prologis’ 2025 FFO per share is pegged at $5.80, which indicates year-over-year growth of 4.32%.

The consensus estimate for First Industrial Realty Trust’s 2025 FFO per share stands at $2.96, which calls for an increase of 11.70% from the year-ago period. 

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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