Is 9.7%-Yielding Textainer Group Too Good To Be True?

Summary
Shares of Textainer are down dramatically, and the stock now yields 9.7%.
However, Textainer relies heavily on growth in global trade.
With no impetus to go higher, and many things that could go wrong, I subscribe to a 'wait and see' strategy for Textainer Group.
"If a security yields ten percent or higher, consider that a red flag." I'm not ashamed to say that's one rule of thumb I learned from watching Cramer, and it's been a pretty valuable rule in practice for me. For the last couple of months, container freight lessor Textainer Group (NYSE: TGH) has been wallowing around at multi-year lows. Textainer is a long-time dividend payer and dividend grower. Usually, Textainer has yielded around 5% or 6%. Today, however, Textainer yields a stunning 9.7%. For me, that is indeed a red flag, but let's take a closer look. This article looks at Textainer Group's fundamentals, as well as its ability to continue paying dividends.
Beat down

Courtesy of Google Finance
Textainer, as you can see, has been beaten up pretty badly, yet dividends have not yet been cut. To understand why Textainer is down so much, we must first understand what the company does. Textainer is the biggest independent owner of intermodal container freight; the long boxes you often see being loaded onto ships and hauled atop trucks. Textainer is heavily levered because this is a very capital-intensive business. The company is also highly dependent... Read more

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