Jim Cramer on Iron Mountain (IRM): “It’s Been an Incredible Stock”

Jim Cramer expressed enthusiasm for Iron Mountain Incorporated (NYSE:IRM) during the Mad Money program on September 17. He described the company's stock as "incredible," noting its classification as a real estate investment trust (REIT) that generates revenue through physical records management, secure document destruction, and digital infrastructure expansion.

Iron Mountain reported a 18.7% year-over-year revenue increase and a 16.8% organic growth in Q2, reaching $2.03 billion in total revenue. The core physical storage business provides consistent cash flow, with storage rental revenue growing 11.5% year-over-year. Adjusted funds from operations rose 17% to $432.7 million, or $1.44 per share.

The company has invested in higher-growth areas like digital solutions and data center operations, with the latter posting a 39% revenue growth during the second quarter. As a REIT, Iron Mountain pays a quarterly dividend of $0.864 per share, offering a forward yield of over 3%. However, the stock faces challenges due to capital-intensive real estate expansion, elevated leverage from substantial capital expenditures, and sensitivity to interest rate fluctuations.

The stock is currently trading at a forward multiple of 58.14x, requiring continued growth to support cash flow and maintain dividend coverage. Insider Monkey data shows a slight decrease in institutional ownership, with 39 hedge funds holding positions in Iron Mountain at the end of the second quarter compared to 40 in the previous quarter.

Cramer recommends IRM as a buy candidate following its decline from record highs, citing its stable cash flow from physical storage and exposure to high-growth digital infrastructure. The company's predictable earnings stream and stable dividend make it an attractive option for long-term investors, despite elevated debt levels.