How to Put $100 in Your Retirement Fund Each Month With Iron Mountain Stock

Iron Mountain (NYSE: IRM), a global leader in storage and information management solutions, has long been a staple in dividend-focused portfolios. With a history of quarterly payouts and a current yield of 3.06%, it offers a compelling opportunity to grow retirement savings through consistent, recurring income. But is IRM's dividend sustainable, and does its valuation justify a monthly $100 investment? Let's break it down.

The $100 Monthly Investment: A Dividend Blueprint

At its closing price of $102.65 on June 19, 2025 (per recent data), a $100 monthly investment in IRM would purchase approximately 0.97 shares each month. Over a year, this would accumulate to roughly 11.7 shares, generating a $9.20 annual dividend from the current quarterly payout of $0.79/share. While modest, this strategy compounds over decades, especially if dividends grow.

But here's the catch: dividend growth must outpace inflation for this plan to succeed. IRM's dividend has climbed from $0.62 in 2023 to $0.79 in 2025—a 27% increase over two years—but this growth is uneven. The payout ratio (dividends relative to earnings) stands at a staggering 386.76%, meaning IRM is distributing nearly four times its earnings to shareholders. Such a metric is unsustainable long-term unless earnings rebound sharply or the company accesses cheap debt.

Valuation: Is IRM Overpriced?

At a price-to-earnings (P/E) ratio of 51.67 (as of April 2025), IRM trades at a premium relative to its sector. While high P/E ratios can reflect growth expectations, they also signal risk. If earnings fail to materialize, the stock could correct sharply.

The dividend yield of 3.06% (calculated using the June 19 closing price) is competitive but not a guarantee. A declining stock price could erode yield further, while a rising price would dilute dividend income. For instance, if IRM's stock jumps to $138.38 (as a 2024 forecast predicted), the yield would drop to 2.17%, reducing annual income from $100 investments to just $4.50.

Risks to Consider

1. Payout Ratio Sustainability: The 386.76% ratio suggests dividends are funded by non-earnings sources (e.g., debt or asset sales). A recession or earnings slump could force a dividend cut.
2. Valuation Volatility: The stock's P/E ratio is nearly double its 5-year average, leaving it vulnerable to profit warnings.
3. Sector Competition: The storage industry faces pressure from digitization and rising interest rates, which could reduce demand for physical record-keeping.

Investment Strategy: Proceed with Caution

While IRM's dividend is tempting, its valuation and payout ratio demand a limited, strategic approach:
- Dollar-Cost Average: Invest $100 monthly to mitigate price swings.
- Set a Dividend Threshold: Sell if the payout ratio exceeds 150% or the yield drops below 2.5%.
- Pair with Higher-Growth Stocks: Balance IRM's income with growth assets to offset its risks.

Final Verdict

Iron Mountain offers a rare blend of dividend yield and steady income, but its elevated valuation and precarious payout ratio require vigilance. For retirees seeking modest, predictable returns, a small position in IRM—coupled with regular monitoring—could work. However, investors should treat it as a satellite holding, not a core portfolio pillar.

In the words of Warren Buffett: “Risk comes from not knowing what you're doing.” Before buying IRM, ensure you understand the trade-off between its dividend allure and its financial fragility.

Data as of June 19, 2025. Past performance does not guarantee future results.