Critical Comparison: AvalonBay Communities (NYSE:AVB) vs. Iron Mountain (NYSE:IRM)

Iron Mountain (NYSE:IRM) and AvalonBay Communities (NYSE:AVB) are both large-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, profitability, valuation, earnings and analyst recommendations.

Valuation and Earnings

This table compares Iron Mountain and AvalonBay Communities”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iron Mountain	$5.82 billion	6.00	$184.23 million	$0.66	180.33
AvalonBay Communities	$2.84 billion	10.86	$928.83 million	$6.72	32.28

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

Dividends

Iron Mountain pays an annual dividend of $2.86 per share and has a dividend yield of 2.4%. AvalonBay Communities pays an annual dividend of $6.80 per share and has a dividend yield of 3.1%. Iron Mountain pays out 433.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AvalonBay Communities pays out 101.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AvalonBay Communities is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Iron Mountain and AvalonBay Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Iron Mountain	3.94%	595.44%	3.06%
AvalonBay Communities	29.61%	7.16%	4.05%

Analyst Recommendations

This is a summary of recent ratings for Iron Mountain and AvalonBay Communities, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iron Mountain	1	0	5	0	2.67
AvalonBay Communities	0	11	7	0	2.39

Iron Mountain currently has a consensus target price of $113.00, indicating a potential downside of 5.06%. AvalonBay Communities has a consensus target price of $225.88, indicating a potential upside of 4.12%. Given AvalonBay Communities’ higher possible upside, analysts plainly believe AvalonBay Communities is more favorable than Iron Mountain.

Insider and Institutional Ownership

80.1% of Iron Mountain shares are owned by institutional investors. Comparatively, 92.6% of AvalonBay Communities shares are owned by institutional investors. 2.1% of Iron Mountain shares are owned by insiders. Comparatively, 0.4% of AvalonBay Communities shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Iron Mountain has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, AvalonBay Communities has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Summary

AvalonBay Communities beats Iron Mountain on 10 of the 16 factors compared between the two stocks.

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.

About AvalonBay Communities

As of December 31, 2023, the Company owned or held a direct or indirect ownership interest in 299 apartment communities containing 90,669 apartment homes in 12 states and the District of Columbia, of which 18 communities were under development. The Company is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in leading metropolitan areas in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California, as well as in the Company's expansion regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado.