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SeaCube Container Leasing Ltd. - Value
5/11/2012 1:00:00 AM
The container cycle isn't over yet. SeaCube Container Leasing Limited ( BOX ) recently saw revenue jump 33% in Q1 as utilization rates remained high. This Zacks #2 Rank (Buy) is still dirt cheap with a forward P/E of only 6.9.
SeaCube is one of the largest container leasing companies in the world and offers long-term contracts to many of the big shipping lines. It owns or manages 580,379 units, equivalent to about 914,313 TEUs of containers and generator sets.
The containers consist of both refrigerated and dry containers. It has 7 offices worldwide.
SeaCube Beat By 6.9% In Q1
On May 7, SeaCube reported first quarter results and surprised on the Zacks Consensus for the third quarter in a row. Earnings per share were 62 cents compared to the consensus of 58 cents. That is growth of 34% over last year.
Revenue rose 33% to $49 million from $36.8 million in the year ago quarter.
Average utilization was still high at 97.7%.
SeaCube still sees strong container demand in 2012. It has invested $240.8 million year to date in equipment.
64% of those containers have already been signed onto long-term leases.
Raised The Dividend Again
Not only is SeaCube a value stock but it pays out a juicy dividend which it has increased 40% since going public in October 2010.
The Board recently raised it again, declaring a quarterly dividend of 28 cents per share, an increase of 7.7% over the prior quarter.
That is a dividend yield of 5.8%.
2012 Zacks Consensus Estimate Jumps
The analysts didn't waste any time in raising estimates for the year after the first quarter earnings surprise.
4 out of 5 estimates rose for 2012 in the last week pushing the 2012 Zacks Consensus up to $2.65 from $2.56.
That is earnings growth of 21% as the company made just $2.19 in 2011.
Dirt Cheap Stock
Despite shares trading at the highest level since the company went IPO in October 2010, there's still plenty of value.
In addition to a P/E under 7, which is WAY under the average of the S&P 500 of 13, SeaCube also has a price-to-book ratio of 1.6.
A P/B ratio under 3.0 usually indicates value. It is also much cheaper than the average of the S&P 500 of 2.5.
There are no indications that a slowdown is looming in the container industry.
With a high dividend yield, double digit earnings growth, and a low P/E, SeaCube is a value stock to keep on your radar.
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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 .
SEACUBE CONTAIN (BOX): Free Stock Analysis Report
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