Iron Mountain Dividend Strategy: Analyzing Potential Gains Ahead
This morning, our DividendChannel.com Dividend Alerts service issued a “Potential Dividend Run Alert” for Iron Mountain Inc (NYSE: IRM). Let’s take a closer look at this situation and what it means for investors.
Understanding the Dividend Run Concept
What is a “Dividend Run”? This interesting term was introduced to us at a past ValueForum conference. To explain it well, we start with the expected behavior of a Stock on its ex-dividend date.
Meaning of the Ex-Dividend Date
The ex-dividend date is the trading day when any buyer no longer qualifies for the dividend payment. To receive the dividend, investors need to buy shares before this date. Typically, the share price is expected to drop by the dividend amount on the ex-dividend date; however, various market conditions can influence stock prices on any given day.
If a buyer is entitled to a $0.785 dividend before the ex-date but no longer entitled afterward, then a price drop makes sense. If the price did not fall, buyers would essentially pay $0.785 more for shares without receiving the dividend. Therefore, if a stock’s price is anticipated to drop on the ex-date, it stands to reason that the stock should rise in price before the dividend payment. A company that consistently earns money and pays dividends should not see its stock price fall continuously, so the expectation of the upcoming dividend creates a “pressure” for the stock to experience a potential Dividend Run.
Different Strategies for Capturing Dividend Runs
The timeframe for capturing Dividend Run effects may vary among different investors. Some prefer to invest and sell on specific dates, while others opt for dollar cost averaging. Some may buy just before the ex-dividend date, hold for the payment, and then sell. On the other hand, a capital gain-focused strategy might involve selling one day before the ex-dividend date to maximize potential gains. A common timeframe discussed is buying roughly two weeks (ten trading days) before selling.
Historical Performance of Iron Mountain’s Dividends
For instance, the $0.715/share dividend went ex-dividend on 09/16/24. The closing price on the previous trading day was $117.06, and two weeks prior, the closing price was $111.99. This indicates that IRM gained $5.07 in price leading up to this dividend.
Examining the last four dividends paid by IRM reveals that following this strategy resulted in capital gains exceeding the dividend amount three out of four times, culminating in a total gain of $5.37 in capital. This sum surpasses the total dividends paid in this period, which amounted to $2.73. Here’s the data:
| Ex-Dividend | ——Price 2 Weeks Prior—» | ——Price 1 Day Prior—» | Run Gain/Loss | |||
|---|---|---|---|---|---|---|
| 12/16/24 | 0.715 | 11/29/24 | 123.67 | 12/13/24 | 111.90 | -11.77 |
| 09/16/24 | 0.715 | 08/29/24 | 111.99 | 09/13/24 | 117.06 | +5.07 |
| 06/17/24 | 0.65 | 05/31/24 | 80.69 | 06/14/24 | 88.02 | +7.33 |
| 03/14/24 | 0.65 | 02/28/24 | 75.36 | 03/13/24 | 80.10 | +4.74 |
| Div Total: | 2.73 | “Divvy Run” Total: | +5.37 | |||
What’s Next for Iron Mountain
In approximately two weeks, Iron Mountain Inc (NYSE: IRM) will go ex-dividend for its latest dividend of $0.785/share. Will the pattern of a Dividend Run occur again?
Upcoming Dividend: $0.785/share
Ex-Div Date: 03/17/25
Payment Date: 04/04/25
Dividend Frequency: Quarterly
Full IRM Dividend History »
While past performance is no guarantee of future results, investors who track Dividend Runs should consider keeping IRM on their radar. The stock currently shows an implied annualized yield of 3.37%.
Stay tuned for future Dividend Run candidates, and for email alerts directly to your inbox, sign up for our complimentary Dividend Alerts service at DividendChannel.com.
also see:
• Cheap Dividend Stocks
• Institutional Holders of PEI
• LXP Options Chain
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
