Iron Mountain (NYSE:IRM) & Extra Space Storage (NYSE:EXR) Critical Review

Extra Space Storage (NYSE:EXR) and Iron Mountain (NYSE:IRM) are both large-cap real estate companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, risk, earnings and valuation.

Dividends

Extra Space Storage pays an annual dividend of $6.48 per share and has a dividend yield of 4.3%. Iron Mountain pays an annual dividend of $3.46 per share and has a dividend yield of 2.8%. Extra Space Storage pays out 143.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Iron Mountain pays out 380.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Extra Space Storage has increased its dividend for 1 consecutive years and Iron Mountain has increased its dividend for 3 consecutive years. Extra Space Storage is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Extra Space Storage has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Iron Mountain has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Earnings and Valuation

This table compares Extra Space Storage and Iron Mountain”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Extra Space Storage	$3.45 billion	9.18	$974.00 million	$4.53	33.06
Iron Mountain	$6.90 billion	5.28	$144.59 million	$0.91	134.62

Extra Space Storage has higher earnings, but lower revenue than Iron Mountain. Extra Space Storage is trading at a lower price-to-earnings ratio than Iron Mountain, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

99.1% of Extra Space Storage shares are owned by institutional investors. Comparatively, 80.1% of Iron Mountain shares are owned by institutional investors. 1.0% of Extra Space Storage shares are owned by company insiders. Comparatively, 1.7% of Iron Mountain shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Extra Space Storage and Iron Mountain’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Extra Space Storage	27.80%	6.70%	3.27%
Iron Mountain	5.54%	-85.44%	3.30%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Extra Space Storage and Iron Mountain, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Extra Space Storage	0	10	6	0	2.38
Iron Mountain	0	2	4	0	2.67

Extra Space Storage currently has a consensus target price of $147.73, indicating a potential downside of 1.36%. Iron Mountain has a consensus target price of $135.17, indicating a potential upside of 10.34%. Given Iron Mountain’s stronger consensus rating and higher possible upside, analysts plainly believe Iron Mountain is more favorable than Extra Space Storage.

Summary

Extra Space Storage beats Iron Mountain on 9 of the 17 factors compared between the two stocks.

About Extra Space Storage

Extra Space Storage Inc., headquartered in Salt Lake City, Utah, is a self-administered and self-managed REIT and a member of the S&P 500. As of December 31, 2023, the Company owned and/or operated 3,714 self-storage stores in 42 states and Washington, D.C. The Company's stores comprise approximately 2.6 million units and approximately 283.0 million square feet of rentable space operating under the Extra Space, Life Storage and Storage Express brands. The Company offers customers a wide selection of conveniently located and secure storage units across the country, including boat storage, RV storage and business storage. It is the largest operator of self-storage properties in the United States.

About Iron Mountain

Iron Mountain Incorporated (NYSE: IRM) is a global leader in information management services. Founded in 1951 and trusted by more than 240,000 customers worldwide, Iron Mountain serves to protect and elevate the power of our customers’ work. Through a range of offerings including digital transformation, data centers, secure records storage, information management, asset lifecycle management, secure destruction and art storage and logistics, Iron Mountain helps businesses bring light to their dark data, enabling customers to unlock value and intelligence from their stored digital and physical assets at speed and with security, while helping them meet their environmental goals.