Attention dividend hunters! Iron Mountain Incorporated (NYSE:IRM) will be distributing its dividend of $0.59 per share on the 02 April 2018, and will start trading ex-dividend in 2 days time on the 14 March 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Iron Mountain’s latest financial data to analyse its dividend characteristics. Check out our latest analysis for Iron Mountain

5 checks you should do on a dividend stock

When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:

• Is it paying an annual yield above 75% of dividend payers?

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has it increased its dividend per share amount over the past?

• Is is able to pay the current rate of dividends from its earnings?

• Will it have the ability to keep paying its dividends going forward?

How well does Iron Mountain fit our criteria?

Although REITs are expected to payout a high portion of the earnings, Iron Mountain currently pays out more than double its net income, meaning that dividend is predominantly funded by retained earnings. In the near future, analysts are predicting a more sensible payout ratio of 189.98%, leading to a dividend yield of around 6.99%. In addition to this, EPS should increase to $1.01, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Unfortunately, it is really too early to view Iron Mountain as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Iron Mountain produces a yield of 7.07%, which is high for REITs stocks.

Next Steps:

After digging a little deeper into Iron Mountain’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three fundamental factors you should further examine: