Container Stocks Offer Above-Market Dividend Yields


Two container leasing stocks in the top-rated Commercial Services-Leasing group pay above-market yields and are forming new chart patterns.

Tal International ( TAL ) recently raised its quarterly dividend to 64 cents a share, up from 62 cents. The company has hiked its payout nearly every quarter since slashing it to a penny a share in 2009.

On an annual basis, Tal pays $2.56 a share. It has a yield of about 5.8%, which is more than double that of the S&P 500. Tal has the second-highest yield in its group.

Tal cleared a long cup base Jan. 28 and rose 11% before pulling back. It's now nearly five weeks into a possible flat base. It's carved out a strong uptrend and stayed above its 10-week line since December.

Tal showed single-digit percentage gains or even declines in EPS in recent quarters, but analysts see a 14% rise for the current period.

Textainer Group Holdings ( TGH ) also has shown slight declines in quarterly EPS lately, with more of the same expected with its next quarterly report. It had been showing strong quarterly growth for several years, but its adjusted profit slipped in the latest two periods due to losses in derivatives.

But its dividend remains attractive. Last month, the company raised its payout to 45 cents a share from 44 cents -- its 12th-straight quarterly increase. Textainer's dividend has jumped 22% since the fourth quarter of 2011.

The company pays shareholders $1.80 per share on an annual basis, which gives the stock a yield of 4.4%. Its yield is at about the midpoint of its peers.

Like Tal, Textainer is pulling back after breaking out from a large cup base in January. But the stock has already formed a new pattern -- a five-week flat base with a 44.06 entry.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: TAL , TGH

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