Since last month’s US-China trade war, stocks have taken a hit. The Dow Jones and S&P 500 are both down about 4%—not enough to sound doomsday alarms, but still enough to make some investors anxious and scramble.
But you can be smarter than that. There’s always an opportunity if you know where to look. And you should be looking at high-yield dividend stocks.
Of course, no stock is immune to market downturns. But savvy investors look at more than just current stock price. They also see the real potential represented by its dividend yield. The stock I’m going to tell you about has an incredible 7.87% dividend yield right now.
What’s more is that stock has a stranglehold on its market, its client comprising about 95% of Fortune 1000 companies, and it’s been in this business for almost 70 years.
Simply put, this is an icon of a company.
Plus, with its high dividends, growing market, and current share price, this stock is in a great position to buy. Let me break it down a little more for you….
Cybersecurity is Big
The world faces cybersecurity threats now more than ever. The scale and speed of cyber threats is growing every day.
And no company is safe. In 2013 one of the world’s largest internet companies, Yahoo, was hacked. Three billion user accounts were compromised. Marriott, one of the largest hotel chains in the world, had 500 million accounts’ data leaked last year.
In response, there’s been a flurry of companies offering data security. Relatedly, the government is starting to pay attention and making it a must that companies take data security seriously. Just last year, the European Union set down rules and regulations for companies operating in the EU to ensure that they make data security a top priority.
In fact, some are calling cybercrime one of the biggest challenges our society is facing for the next 20 years. From 2015 to 2021, the cost of cybercrime is expected to double from $3 trillion USD to $6 trillion USD.
To put that in perspective, cybercrime is going to become more profitable than the international illegal drug trade. In fact, cyberattacks are THE fastest growing crime in America. The reason is that cybercrime isn’t just a breach of data. It can mean stolen money, major setbacks to company productivity, theft of intellectual property, embezzlement, fraud, and harm to a brand, just to name some of the issues.
Now, that all sounds like bad news.
But for the savvy investor, it can be good news. You see, by investing in cybersecurity you might be able to harvest big gains. And I just so happen to have a stock I think could hit do you well…
This Cybersecurity Stock Should Be in Your Crosshairs
Let me introduce you to: Iron Mountain Inc. (NYSE: IRM).
Headquartered in Boston, Massachusetts, Iron Mountain has a long and storied history. It was founded in 1951 by Herman Knaust, a successful businessman. And just like what I’m recommending today, he saw opportunity in data security during bleak times (except he recognized the importance of data security during the Cold War). In turn, he started a business to protect corporate information in the case of nuclear attack or other catastrophes. He did this by opening underground vaults and storing files as well as other protected items with his first ever customer being East River Savings Bank.
Today, Iron Mountain serves 230,000 customers across nearly every single Fortune 1000 company with its 1,400 facilities spanning 53 countries on six continents worldwide. Even more impressively, no one customer accounts for more than 1% of their revenue. This not only speaks to their incredible diversification, ruling out any potential concerns for concentration risk, but should also mean that Iron Mountain is in the driver’s seat when partnering with clients. Finally, their protected possessions rival that of the world’s top museums, protecting items once belonging to the likes of Charles Darwin, Princess Diana, and Frank Sinatra.
A lot of Iron Mountain’s success can be attributed to two sources. First, it’s their strategic moves. Specifically, they have been focusing on high-growth industries. One example move was in teaming up with MakeSpace, “the fastest growing on-demand storage company.” This allowed Iron Mountain and MakeSpace to provide services to 24 markets. And with the cloud services industry projected to grow nearly 20% just this year, Iron Mountain is smart is launching their own cloud server for data storing and protection. Having recently partnered with Google Cloud, their dominance and innovative capabilities are poised to climb to astronomical heights. It wouldn’t surprise me if Iron Mountain quickly became the number data security provider on cloud platforms as well.
A second reason for their success is an incredible retention rate. Iron Mountain retains 98% of their business clients. This is because of their excellent service, expertise of regulations, and the fact that changing to a new data security provider would cost businesses nearly 19 times what it costs them to just stick with Iron Mountain. More simply, it’s hard to compete with Iron Mountain.
And with this success comes rewards for shareholders. For the past three years, Iron Mountain’s dividend yield has been 5% and higher—most recently, sitting at just below 8%. Even better, current models forecast that Iron Mountain will increase its dividend yield by approximately 3.3% next year.
Besides its consistently high dividend, the company also looks poised for growth. Zacks Consensus Estimates project about 2% growth in revenue, projecting 4.3 billion this year. With a Forward P/E ratio of 13.69, Iron Mountain stock is a discount compared to its industry average of 15.07. In fact, with a current price of $31.04, Wall Street analysts estimate Iron Mountain stock to rise to an median of $36.50 or even a high of $51.00 (which could offer a juicy 64% upside).
Putting it all together, the signs are looking too good to take a pass on Iron Mountain. They’ve got tasty dividend yield, their strategic moves set them apart as leaders and innovators, and their dominance in their current market isn’t going to be challenged any time soon. Even more, the fundamentals are looking great, suggesting that Iron Mountain stock is at a discount right now. If you’re looking for exposure to the cybersecurity market, IRM could be the one for you.
-Investing Insider Magazine