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Strategies & Market Trends : Dividend investing for retirement
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To: E_K_S who wrote (9412)7/13/2011 9:44:12 AM
From: Steve Felix  Read Replies (2) of 34328
 
Re: BOX ... I have not been able to come up with any reports on BOX. I did listen to their conference call. As far as the industry, I have only looked at TAL ( 3X BOX market cap ) and CAP ( only slightly larger, 1.1 BOX market cap )

CAP pays no dividend. TAL div. % is higher than BOX, with their payout ratio about 5% higher also.

I don't know where Yahoo gets their PEG ratios of BOX 1.61, CAP .89, and TAL .87.

Must be BOX isn't going to increase earnings through 2013 as their current PE is roughly even with projections for CAP and TAL. Guess that is the bet.

One point of the conference call was that they could lease containers as fast as they could get them, which was not fast enough. Seems there is/was a backup for everyone.

Note both are well below current targets for what that is worth: CAP $29 and TAL $40.

A rising tide floats all boats?

TAL from CS:

Stock Yielding ~5%. TAL boosted its Q1 dividend to $0.50 (up from $0.45
in Q4). The payout ratio was ~56% in Q1 (down 3% Q-Q). We expect
management to continue to balance fleet growth with dividend increases
with a focus on fleet growth given the attractive returns (14-15% cash on
cash returns) being generated on new box leases.
¦
Its Still A Spread Business. New box prices are estimated at $2,800 down
from a peak of about $2,900. Not surprisingly the drop in box prices has put
downward pressure on lease rates – this should be expected given the tight
correlation with lease rates and box prices.
¦
Increasing Target Price to $40 (from $38). Our $40 target price is based
on applying an 11x PE multiple to our 2012 EPS estimate of $3.43 (from
$3.50) plus a $3/share benefit from TALs tax deferred status. Our 2012 pretax
EPS estimate is $5.10 which translates to an 8x PE multiple. We are also
increasing our 2011 EPS estimate to $3.33 (from $3.15). The earnings
revisions were driven by changes to fleet growth and gains on containers.

Year                 12/10A    12/11E    12/12E   12/13E
EPS (CS adj.) (US$)      2.15      3.33        3.43       3.55
P/E (x)                  17.0      11.0        10.7       10.3


CAP:

Our Thoughts: CAI posted another strong quarter driven by continued
strong demand for new boxes. We expect the combination of strong demand
for new and old boxes to keep utilization and container gains strong. We
continue to expect management to take advantage of its strong balance
sheet to purchase new boxes which should drive above average fleet growth
into next year. We reiterate our Outperform rating on CAI.

Increasing EPS estimates. We are increasing our 2011 EPS estimate to
$2.23 (from $2.00). The upwards earnings revisions are driven by better
than expected gains on equipment in Q1 and expectations of a continued
strong secondary market for used containers in 2011. Additionally we
lowered our D&A expenses related to the asset write-ups.

Year                12/10A     12/11E     12/12E     12/13E
EPS (CS adj.) (US$)   1.48         2.23         2.47         2.87
P/E (x)               18.2         12.0        10.8            9.3
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