Textainer: Dividend Seems Safe But Investors Need Courage

Back in 2013 I purchased shares in Textainer (NYSE: TGH). Back then, Textainer offered a nice dividend of 5.4%, but was also one of the fastest dividend growers. It has raised dividends for the last 7 years and in the last 5 years it grew dividends over 50% yearly compounded. The payout-ratio at that time was around 45% which meant some room to grow. I did notice its debt/equity-ratio was 2.3x, but with the interest coverage ratio at a reasonably healthy 3x I concluded that the amount of debt was not excessive.
Let's fast forward two years and really take a good look at what happened with the stock price this year. In the beginning of this year TGH's stock price hovered around $34. In the past few months however the stock price took a nosedive. The last few weeks TGH is trading roughly between $16-17. That's a massive decrease in such a short period. Peers such as TAL (TAL) and CAI (NYSE: CAI) experienced similar decreases, whereas the S&P500 only lost about 5% YTD.

Source: Google Finance
Clearly investors have dumped container leasing companies to the point where TGH is yielding over 11%. Of course I am not satisfied with my paper loss. However I do see an opportunity at these price levels. But before acting on this opportunity I would like investigate if something materially has changed. This article will attempt to cover most of the reasons I can think of why TGH has been dropped by so many people lately.
Macroeconomic events... Read more

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