TAL & TGH

[mikesdca]

Hello All, first time poster but I have been lurking for a while. I have had TAL & TGH on my watch list for a while (about 2 years). It seems like they have been trending downward ever since I added them to my watch list so I have been watching their yields rise for a while.

Well, the last few days they have just been hammered. TGH is now $16.97 with a yield of 11%. TAL now is $18.40 with a yield of 15.6%. I think when I added them to my watch list they were in the $40s or high $30's with yields of 6-7%.

I am beginning my own DD, but wondering if others have thoughts. Both have now held their dividend at the same rate for 7-9 quarters, but they haven't officially been dropped from the CCC (at least I don't think so). Still, even without increases those yields--if not cut--are something to see for what looks to be market leaders in what they do. Again, I am starting my own DD, but if anyone is far along I would love to hear some thoughts. I will post my own after my DD.

I have a portfolio of 16 companies that yields 4.96% at the moment. 9 are Champs (MO, MCD, HCP, KO, T, CTBI, TGT, PG, EMR). 4 Contenders (SO, OHI, COP, O). 1 Challenger (PM) and 2 Frozen Angels (RDS/B, BP). I am primarily seeking income, but safe income which grows a bit. My portfolio 1-3-5 YR dividend growth rates are 4.5%, 6.8% & 8.2% respectively. I am not so concerned with the dividend growth of an individual company as I am with the portfolio as a whole. Example, I am buying the oil companies knowing there might be a freeze, but with their yields I would not sell. A cut, would be another matter.

Thanks!

[Kerim]

Hi Mikescda! These are not companies that I've ever taken a close look at, so can't add much substantive here. But wanted to welcome you to the forum and thank you for posting. Maybe someone else has some insight.

[benjamen]

They are both very highly leveraged companies, with declining projected earnings, that already have dividend payout ratios over 50%.

From Yahoo finance:
TGH Debt/Equity: ~242
TAL Debt/Equity: ~490

[mikesdca]

(08-06-2015, 11:51 AM)Kerim Wrote: Hi Mikescda! These are not companies that I've ever taken a close look at, so can't add much substantive here. But wanted to welcome you to the forum and thank you for posting. Maybe someone else has some insight.

Thanks for the welcome, I will continue my own DD and hope to report what I find. Thx

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(08-06-2015, 01:38 PM)benjamen Wrote: They are both very highly leveraged companies, with declining projected earnings, that already have dividend payout ratios over 50%.

From Yahoo finance:
TGH Debt/Equity: ~242
TAL Debt/Equity: ~490

Yes, that is what I am seeing also. Part of the dividends are also ROC I think.

[mikesdca]

Both were up big today, after the crash tho I don't think that means much.

[ronn38]

I've been watching this stock too. Some interesting articles on SA regarding it. Just looking at your other tickers, those seem like very solid choices (though in the middle of this correction, I'm sure you're bleeding like the rest of us). As long as you see THG as a more speculative play--though certainly much safer than mine with LINE;-)-- I think the dividend more than compensates for risk here.

MS puts this quarter's Current Ratio at 2.24 and the D/E at 2.47, so there's that to consider. Since 2011 the share count has increased by 7 million (14%), but has held at 57 mil since 2013.

Considering the uncertainly of the world economy, and the tax consequence of ROC rather than dividends if you sell at a profit, I would look at this as a long term holding and allocate only a prudent amount of your portfolio.

Just my thoughts...

Ronn

[hendi_alex]

It looks to me that these two companies have moved from a period of several years dominated by tail winds and into a period of significant head winds. While I hold a very modest weighting of each, will not increase the weighting until the climate once again becomes favorable for their business. These two positions are part of my Marine shipping/marine lease/ marine financing motif. Positions include: CMRE DO ESV HAL NAT NE NMM SDRL SFL SLB TAL TGH TNK Average yield is high single digits. Lowest weightings are SDRL and TAL.

[mikesdca]

These two are just falling knives at the moment. Its fun watching but I can't buy these now. Need them to stabilize. Thanks for all the comments