New Trade for March 7th, 2022

Stocks plunged while oil prices surged and volatility heightened, heading into today’s session as markets processed Russia’s intensifying attacks on Ukraine.  The move away from risk assets continued as unresolved global tensions took center stage with no end in sight.

“Investors aren’t really just jumping out and exiting. What they’re doing is rotating from Europe to the U.S., from cyclicals to big cap and defensive type names,” said Ally’s chief markets and money strategist Lindsay Bell.  “That’s a positive sign, but what we’re going to need to see is that re-rotation back into the more growthy, riskier areas of the market to show that maybe the risk-on mode is back in play.”

With so much market turbulence in 2022, investors have been seeking shelter among so-called “safety trades.”  Stocks with relatively low volatility that come along with a dependable payout can bring peace of mind during uncertain times.  Today we’ll focus on one such stock.  

Stansberry Research:

Wall Street Legend Warns: “A Strange Day Is Coming to America”

“A massive and surprising new transition could determine the next group of millionaires,” says Chaikin, who predicted the 2020 market crash. “While leaving 99% of the public worse off than before.”

“If you own regular stocks, you’re in for a big surprise,” he adds. [Full Story Here…]

Boston-based, Information management services company Iron Mountain Inc. (IRM) provides information destruction, records management, and data backup and recovery services to more than 220,000 customers in 58 countries.  The company has around 1,500 leased warehouse spaces and underground storage facilities around the world. 

As a testament to Iron Mountain’s leadership in its core business of storage, the company serves 225,000 customers, which includes about 95% of the Fortune 1000 companies.  As for what the company stores, the wills of Princess Di and Charles Darwin housed in their facilities, as well as the original recordings of Frank Sinatra and Bill Gates’ Corbis photographic collection.   

The need for Iron Mountain’s physical facilities will likely never disappear. Still, as digital storage becomes more widely adopted, the company should continue to grow along with its global data-center business, which contributed 8% of adjusted earnings through the first three quarters of 2021.  The company and analyst community alike see the data center as a driver of steady growth in the coming years.  

During its Q3 earnings call, Iron Mountain blew past consensus expectations of $0.70 FFO (funds from offering) per share, reporting $0.90.  “Our Q3 performance demonstrates the continued strength of the business throughout the year, driven by our broad offerings, deep customer relationships, resilient business model, and strength of our team,” said CEO William Meaney. “Our Mountaineers have been executing well despite what continues to be a challenging environment, and we are pleased to continue to drive accelerated growth with continued strong uptake in our digital and SITAD offerings resulting in 19% year over year growth, strong storage growth of 3.2% with positive organic volume, and continued momentum in our Data Center business, which is well on track to deliver bookings in excess of 30 megawatts for the year.”

Iron Mountain forecasts that revenue this year will increase 7.5% from 2020 to about $4.47 billion.  And the company also believes that its AFFO per share for this year will surge 10% from the previous year to about $3.39.  Based on that projection, the payout ratio for its 5% dividend yield will be around 73%, allowing the company to retain the capital necessary to expand its data-center business even as it rewards shareholders.