Head to Head Review: istar (STAR) versus Iron Mountain (IRM)

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istar (NYSE:STAR) and Iron Mountain (NYSE:IRM) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Earnings & Valuation

This table compares istar and Iron Mountain’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
istar $798.12 million 0.71 -$32.26 million ($0.95) -9.21
Iron Mountain $4.23 billion 2.13 $363.35 million $2.30 13.65

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

Risk and Volatility

istar has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, Iron Mountain has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for istar and Iron Mountain, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
istar 0 1 0 0 2.00
Iron Mountain 2 4 1 0 1.86

istar presently has a consensus price target of $11.50, suggesting a potential upside of 31.43%. Iron Mountain has a consensus price target of $35.00, suggesting a potential upside of 11.46%. Given istar’s stronger consensus rating and higher possible upside, equities analysts plainly believe istar is more favorable than Iron Mountain.

Profitability

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

Net Margins Return on Equity Return on Assets
istar -14.17% -5.87% -1.31%
Iron Mountain 8.22% 19.61% 3.05%

Insider and Institutional Ownership

91.6% of istar shares are held by institutional investors. Comparatively, 88.5% of Iron Mountain shares are held by institutional investors. 5.2% of istar shares are held by company insiders. Comparatively, 1.9% of Iron Mountain shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

istar pays an annual dividend of $0.36 per share and has a dividend yield of 4.1%. Iron Mountain pays an annual dividend of $2.44 per share and has a dividend yield of 7.8%. istar pays out -37.9% of its earnings in the form of a dividend. Iron Mountain pays out 106.1% 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 has raised its dividend for 9 consecutive years. Iron Mountain is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Iron Mountain beats istar on 11 of the 17 factors compared between the two stocks.

istar Company Profile

iStar (NYSE: STAR) finances, invests in and develops real estate and real estate related projects as part of its fully-integrated investment platform. Building on over two decades of experience and $40 billion of transactions, iStar brings uncommon capabilities and new ways of thinking to commercial real estate and adapts its investment strategy to changing market conditions. The Company is structured as a real estate investment trust ("REIT"), with a diversified portfolio focused on larger assets located in major metropolitan markets.

Iron Mountain Company Profile

Iron Mountain Incorporated (NYSE: IRM), founded in 1951, is the global leader for storage and information management services. Trusted by more than 225,000 organizations around the world, and with a real estate network of more than 85 million square feet across more than 1,400 facilities in approximately 50 countries, Iron Mountain stores and protects billions of valued assets, including critical business information, highly sensitive data, and cultural and historical artifacts. Providing solutions that include information management, digital transformation, secure storage, secure destruction, as well as data centers, cloud services and art storage and logistics, Iron Mountain helps customers lower cost and risk, comply with regulations, recover from disaster, and enable a more digital way of working.

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