The trade war sent stocks tumbling over the last week, but investors shouldn't panic. While the Dow Jones dropped 676 points (2.5%) over new tariffs enacted by the United States and China on Friday (May 10) and Monday (May 13), the temporary downturn is creating an opportunity.
Investors should shift their attention to high-yield dividend stocks, especially domestic firms in the defense and service sectors. Since these companies focus on U.S. operations, they don't rely on global trade networks to make money.
And we've found the perfect stock to help you recover from the recent turbulence.
This high-dividend stock hasn't been immune from the market's dip, but that's boosted its dividend yield to a juicy 8%. And while that has us excited, we're bullish on this stock and have been for the past year for a couple of reasons.
This stock has been safeguarding valuable data for the past 68 years. And right now, roughly 95% of the Fortune 1000 companies trust this firm to keep their data safe - both digitally and physically - putting this stock in a prime position to rake in profits regardless of the market.
Between its high-dividend yield, the company's forecasted growth, and its share price upside, this stock is a must-buy during the market downturn.
Especially since it has a perfect Money Morning Stock VQScore™...
Why Cybersecurity Is an Invaluable Market
Even before the age of the Internet, consumer privacy has always been a concern. But the difference between now and 68 years ago is the sheer scale of data issues that we see today:
- In 2014, 145 million user accounts were hacked and compromised on eBay Inc. (NASDAQ: EBAY).
- In 2016, Altaba Inc. (NASDAQ: AABA) compromised 3 billion Yahoo! users.
- In 2017, Equifax Inc. (NYSE: EFX) saw a data breach that compromised 143 million people's information.
- In 2018, both Facebook Inc. (NASDAQ: FB) and Marriott International Inc. (NASDAQ: MAR) had massive data scandals - the latter leaked 500 million accounts.
- In the first three months of 2019, over 2 million government official's information had been hacked and stolen from the Dow Jones.
In Facebook's case, the company wasn't hacked. Instead, it simply made 2.2 billion users' information available to third parties with relative ease.
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This set off a chain reaction for tighter digital security across the world.
In 2018, the EU established a new Global Data Protection Regulation (GDPR) across 28 countries that required companies to:
- Receive consent before data processing.
- Protect individual privacy by collecting data anonymously.
- Notify individuals of any breaches in data.
- Safely send data across borders.
- Have data protection officers overseeing operations so they are in line with GDPR.
And this law is applicable regardless of where the data is being processed. Even if it's being done by an American company, it still has to comply with these regulations.
Along with growing regulations, cybersecurity was valued at $137.8 billion globally in 2018 alone. Over the next four years, Money Morning Defense and Tech Specialist Michael A. Robinson says it'll skyrocket to $231.9 billion. That's roughly 68% industry growth in just four years.
But it's only the beginning.
Once 2021 rolls around, cybercrime damages will rocket to $6 trillion, according to Cybersecurity Ventures. The cybersecurity industry is expected to continue growing well into the future. In fact, Robinson says it's the type of market that will make many companies and investors incredibly rich.
And that makes this stock the perfect play during the market downturn as concerns over data security continue to rise.
The Best High-Yield Dividend Stock to Buy Right Now
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The stock is Iron Mountain Inc. (NYSE: IRM), and it has a VQScore of 4.75, our highest score.
Founded in 1951 by Herman Knaust, the company was named after a depleted iron ore mine in the Hudson River Valley. That's where Knaust created his wealth as the "Mushroom King" by growing and cultivating mushrooms.
But as the Cold War moved forward and the political landscape began to shift, Knaust replaced those mushrooms with several secure vaults. He then opened up shop in Manhattan and acquired clients like the East River Savings Bank to deposit and store records in Iron Mountain's vaults.
Knaust was very passionate about data security. In fact, he even sponsored Jewish immigrants coming to the United States following World War II. This was because all of their records had been destroyed, but he wanted them to feel safe and secure that their new American information would be protected amidst the growing nuclear threat.
Nowadays, Iron Mountain protects organizations' data over a huge network of 1,400 facilities in 50 different countries. Over the last 68 years, Iron Mountain has become synonymous with trustworthiness - servicing 95% of all the Fortune 1000 companies in the world.
Its facilities contain valuables and wills from people like Charles Darwin, Princess Diana, Charles Dickens, Frank Sinatra, and even Prince.
But Iron Mountain is also a consistent company that has retained 25% of its stored valuables over the last 22 years.
However, Iron Mountain hasn't developed into the company it is today by simply storing items in vaults. Its acquired data centers all across the globe in countries such as England and Singapore.
Iron Mountain's biggest focus has been on tackling emerging high-growth markets. This includes servicing government agencies, banks, life science, and energy firms - all of which accounted for 18% of the company's total growth in 2017.
The company provides a vast array of data-securing services like document imaging, inventory management, and the disposal of secure information.
Back in mid-2018, the company even launched "Iron Cloud" - a cloud server that will protect and recover important information in the instance of a cyberattack. But it'll also search out and destroy any harmful software detected in the system.
That combination of history and growth means the company is solvent enough to reward its owners. Thanks to Iron Mountain's huge dividend, shareholders get an 8% annual return when they buy shares at current prices.
By year-end 2018, its revenue was $4.23 billion with a net income of $365 million. By 2019, it's expected to grow 2% to 4.3 billion. And in 2020, it's forecasted to reach $4.47 billion in revenue.
Iron Mountain's EPS for last year was also $1.10, while 2019's average estimate is $1.05 after Q1 showed revenue of $1.05 billion (short of Wall Street's predicted $1.06 billion). But in 2020, it's expected to go up again to an EPS of $1.17.
Prior to its earnings report in April, shares traded for $35.84. Now, shares are trading at $31.26 - making this the perfect time to capitalize on Wall Street's short-sightedness. Analysts are still bullish on price targets, saying it could very realistically hit $51 a share in 12 months. That's a 63.1% gain from today's price over the next 12 months alone.
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About the Author
Daniel Smoot is a Baltimore-based editor who helps everyday investors with stock recommendations and analysis. He regularly writes about initial public offerings, technology, and more. He earned a Bachelor's degree from Towson University.