TAL International Group is poised for success this year and offers strong growth for the future. As one of the oldest and largest intermodal container leasing companies TAL exhibits a record of profitability and cash flow. Growth and income strategist Todd Bunton ranked TAL as one of the best growth and income stocks and offered this on TAL’s record and future growth, “With TAL’s dividend and valuation it provides a lot of potential upside. During the 2nd quarter of 2011 TAL blew it out of the water with earnings per share more than doubled year over year.” Additionally, Bunton noted that TAL has produced six consecutive positive earning surprises.
These predictions hold true. Fourth quarter earnings for TAL included an adjusted pre-tax income of $1.57 per fully diluted share which represents a 34% increase from fourth quarter 2010. Leasing revenues were reported at $124.1 million a 31.3% increase from 2010. These gains allowed for a quarterly dividend of $0.55 per share.
What factors are driving this growth? TAL’s strong customer relationships combined with an extensive global operating infrastructure and significant management experience offer a substantial advantage. TAL’s business model makes full use of the attractive attributes of intermodal container leasing. These advantages include: limited risk vs. other equipment types, multiple avenues for growth due to broad product lines, and sustainable margins. Additionally TAL maintains a global presence and logistical strength which allows TAL to maintain a loyal customer base consisting of many of the largest shipping lines in the world.
TAL is experiencing an expansion in trading margins which supports the improvement of key operating metrics. This provides a unique opportunity for accelerated growth. While smaller leasing companies remain static due to capital constraints TAL is experiencing increased fleet growth which offers increased potential for income growth, an increase to expand margins, and embedded value.
In December 2011 SmarTrend identified an uptrend for TAL of $28.22. Currently TAL has more than surpassed the prediction with a price of $39.14. This trend is predicted to continue. As a proven market leader TAL is currently operating in a highly favorable environment for growth and income. Expectations are that these conditions will remain favorable for quite some time. With a low risk of loss due to technological change and little competition from smaller companies TAL will continue to see a rise in residual values. With shipping line customers heavily relying on leasing TAL is in the position to obtain record levels of growth and profitability making it a wise investment.