Expansion continues through the entire container industry.
Textainer Group Holdings Limited
(
TGH
) expanded its fleet by 5.5% year over year in the first quarter.
Despite trading at 2-year highs, this Zacks #1 Rank (Strong Buy)
continues to be a value stock with a forward P/E of just 8.7.
Textainer is the largest lessor of intermodal containers in the
world based on fleet size. It leases dry freight, refrigerated and
specialized containers to more than 400 shipping lines.
The company also sells used containers to more than 1,000 customers
around the world.
Textainer Beat Again In Q1
On May 8, Textainer reported first quarter results and surprised on
the Zacks Consensus Estimate for the 4th quarter in a row. Earnings
were 97 cents compared to the consensus of 94 cents.
Revenue jumped 28.9% to $117.5 million from $91.2 million a year
ago.
Utilization remained near historic highs but did fall 1.3% to 96.9%
from 98.2% a year ago.
The company also continues to expand its fleet. It ordered 224,000
twenty-foot equivalent units ("TEU") of new dry-freight containers
and 15,000 TEU of new refrigerated containers for delivery through
July 2012.
Container Demand Still Remains Strong
Even though utilization rates declined 1.3% year over year, since
April, it has increased steadily. 79% of the company's fleet is
committed to long-term, direct financing and sales-type leases, up
from 76% a year ago.
It also continues to see "strong demand for new containers."
Zacks Consensus Estimate for 2012 Jumps
The analysts got really bullish after this report, as 7 out of 8
estimates moved higher in the last week.
The 2012 Zacks Consensus also rose by 5.1% to $4.09 from $3.89.
That is earnings growth of 14.2% compared to 2011 when the company
made $3.58 per share.
Raised the Dividend For The 9th Quarter In A Row
Shareholders have been rewarded over the last 2 years.
Textainer has raised the quarterly dividend 9 straight quarters and
did so again for the second quarter. The Board of Directors
approved a dividend of 40 cents, a 8.1% increase from the first
quarter.
Textainer is currently yielding 4.4%.
Shares At 2-Year High
Shares have been hot, but there's still plenty of value in
Textainer.
In addition to a P/E under 10, it has a price-to-book of 2.4. A P/B
ratio under 3.0 usually indicates value.
Textainer also has other strong fundamentals, including a 1-year
return on equity (ROE) of 28.6%. This easily beats its peers which
average just 8.5%.
The container companies are still growing earnings and paying out
big paydays to their shareholders. Textainer joins other container
groups in also being an attractive value stock.
Tracey Ryniec is the Value Stock Strategist for
Zacks.com
. She is also the Editor of the Turnaround Trader and Insider
Trader services. You can follow her on twitter at
@TraceyRyniec
.
TEXTAINER GROUP (TGH): Free Stock Analysis
Report
TEXTAINER GROUP (TGH): Free Stock Analysis
Report
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