Textainer Group: Yield Trap, 20% Downside Ahead?

Seeking Alpha author Eli Inkrot recently pointed out that Textainer Group (NYSE: TGH) is trading at the same levels as it was in 2008 during the financial crisis.
If an investor had deployed say $10,000 back in August of 2008, they could have purchased about 555 total shares. Today those same 555 shares would still be worth roughly $10,000. From this information you might suppose that an investment in Textainer has been a poor investment. After an extended share price foray into the $30s and even $40s, you would now be back to where you started...
That same $10,000 beginning investment would still be worth $10,000, but you also would have received nearly $5,700 in dividend payments along the way. In turn, your compound annual gain would be about 6.6% per annum. Just because dividends don't show up on the stock chart doesn't make them any less important.
The kind of mental exercise being performed reflects a good tool a person can use when analyzing the performance of their own portfolio. Even with stocks that trade sideways, you may still be generating a return. Unfortunately, with regards to Textainer Group, this kind of exercise quickly falls apart if you purchased after 2008. It may also fall apart if you're looking at purchasing the stock today.
If you aren't familiar with Textainer Group, they are involved in the purchase, ownership, management, leasing and disposal of a fleet of intermodal containers. Their business is comprised of three segments:... Read more

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