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A Solid 6% Yield, No K-1, Very Low PEG Ratio, 65% Payout Ratio, Industry Leader Turnaround


  • This stock yields 5.8%, with a 65% payout ratio.
  • It's the leader and only dividend play in its niche industry.
  • Its PEG ratio is only .25x, the lowest we've seen in years.
  • Its industry turned around in 2017, and the supply/demand balance favors higher prices in 2018.

Are trade war jitters making your portfolio nervous? Imagine if you were the world's biggest shipping container lessor, like Triton International (NYSE:TRTN), a company which emerged as an industry leader, after a merger with TAL International in mid-2016.

(Source: TRTN site)

TRTN's merger with TAL took it from a 13% share to a 26% market share in the container leasing industry:

(Source: TRTN site)

TRTN's price/share, along with those of competitors CAI International (CAI), and Textainer Group Holdings (TGH), took a big hit in February, when management from CAI and TGH warned of "increased competition from container equipment lessors who are active in the market," and that, "yields on new leases have slightly moderated as competition increases." These statements were made on the CAI and TGH earnings calls, which occurred a week before TRTN's 2/22/18 Q4 earnings report was issued.

All three share prices also were pressured by tariff/trade war talk, and fell along with the general market earlier in February:

The thing is this industry has made quite a turnaround. After struggling with depressed pricing in 2015-2016, container demand and pricing continued to improve in 2017, pushing up dry container lease rates and used container sales prices.

TRTN's management referenced this on the Q4 2017 earnings call.

"We are now seeing a sustained recovery. The powerful turnaround in both market dynamics and market lease rate levels has helped to stabilize this trend during the course of 2017. This rebound has continued into the first quarter, and we're expecting further improvements throughout the whole of 2018."

"We're back to and surpassing the strong revenue earnings and cash flow levels we achieved prior to the market challenges in 2015 and 2016."

"We've also continued to see depot inventories in Asia, for both us and our competition, lowest levels ever recorded, with

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This article was written by

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Target 5-10% yields backed by solid earnings for better portfolio income.

Robert Hauver, MBA, was VP of Finance for an industry-leading corporation for 18 years, and publishes SA articles under the name DoubleDividendStocks. TipRanks rates DoubleDividendStocks in the Top 25 of all financial bloggers, and Seeking Alpha rates us in the Top 5 of several categories, including Dividend Ideas, Basic Materials, and Utilities. 

"Hidden Dividend Stocks Plus", a Seeking Alpha Marketplace service, which focuses on undercovered and undervalued income vehicles. HDS+ scours the world's markets to find solid income opportunities with dividend yields ranging from 5% to 10%-plus, backed by strong earnings.

Analyst’s Disclosure: I am/we are long TRTN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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