July 10, 2011
SeaCube Container Leasing Limited – Value
SeaCube Container Leasing Limited (BOX – Snapshot Report) is cashing in on the hot container leasing environment. This Zacks #1 Rank (strong buy) is super cheap, with a forward P/E of only 7.8.
SeaCube is one of the largest container leasing companies in the world and offers long-term contracts to many of the big shipping lines. It owns or manages 553,130 units, equivalent to about 870,000 TEUs of containers and generator sets.
The containers consist of both refrigerated and dry containers. It has 7 offices worldwide.
Revenue Rose 10.9% in the First Quarter
On May 10, SeaCube reported its first quarter results and saw revenue jump to $36.8 million from $33.2 million in the first quarter of 2010.
Utilization is nearly as high as it can be- with an average of 98.5% in the quarter.
In 2010, there was a shortage of containers worldwide as demand picked up but containers were not delivered to companies during the recession. The containers have been rushing to catch up ever since.
SeaCube ordered more than $316 million in new equipment for delivery though June 2011. 85% of that is already committed to long-term leases.
Big Dividend
SeaCube has been returning cash to shareholders. It will pay a 22 cents per share on July 15 to shareholders of record at the close of business on July 8.
This is the third quarter it has paid a dividend and the second quarter in a row it has paid 22 cents per share.
That is a dividend yield of 5.3%, which is larger than peer Textainer Group (TGH – Snapshot Report) at 4.1%.
Zacks Consensus Estimates Rise
Analysts have been bullish on SeaCube’s prospects for 2011 and 2012 in the last 60 days.
The 2011 Zacks Consensus Estimate has risen to $2.13 from $2.04 per share in that time.
Analysts are looking for 14% earnings growth in 2012, with the Zacks Consensus jumping to $2.43 from $2.21 per share in the last 2 months.
SeaCube is expected to report second quarter results on Aug 9 so we’ll get a better read on the global economy, and the strength of the container business, then.
SeaCube Is Cheap
SeaCube has only been a public company since late 2010. In that time, however, shares have moved sharply higher.
Even with the rise in the share price, SeaCube still has attractive valuations.
In addition to a forward P/E of just 7.8, it also has a price-to-book ratio of 1.7. Normally, a P/B ratio under 3.0 would designate “value.”
Additionally, the company has a return on equity (ROE) of 17.2%.
With SeaCube at single digit valuations, its a cheap play on global growth. It’s juicy 5.3% dividend yield isn’t shabby either.
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Tags: Container Leasing, Container Leasing Limited, Leasing Limited, Limited
Posted by Nicholas Wheeler | Tags: Container Leasing, Container Leasing Limited, Leasing Limited, Limited