Textainer’s consistent growth makes for smart investment
If you’re looking for a solid dividend payer for your portfolio, look at Textainer (NYSE: TGH), which leases intermodal containers worldwide. Its dividend yield was recently 5.6 percent, and the payout has more than doubled over the past five years, with more room to grow.
Intermodal containers are those metal boxes stacked on top of one another in shipyards and railyards. They’re advantageous because they can be transported on trains, ships and trucks with relative ease.
About 95 percent of all global trade travels by ship. And Textainer, though a small company, is one of the biggest players in helping companies move stuff around the world, leasing containers to more than 400 shippers.
Having such a wide variety of clients is crucial, as it leads to fewer empty berths. Items dropped off at one location can be replaced by other items going elsewhere. Textainer’s containers are utilized – and monetized – almost everywhere they travel.
Textainer has 23 years of consecutive dividend increases, management that has been with the company for an average of 19 years, and is, at this point, relatively fairly valued with a P/E ratio near 8. A global economic recovery should boost Textainer’s growth rate, and there are signs that it’s under way. If you’re intrigued, learn more about the company. (The Motley Fool’s Income Investor newsletter has recommended Textainer.)
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Stock prices fluctuate due to supply and demand. If a stock is in great demand, its price will rise. If it falls out of favor, there will be lots of sellers, and the price will keep falling until it hits levels at which others will buy.
One advantage we small investors have is that we can discover a small gem and invest in it early. When institutions eventually start buying (they often can’t get too involved with very small companies), they’ll drive up its price, benefiting the smaller, earlier investors.
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