Yesterday I purchased 57 shares of TGH for $16.20 per share. With this purchase I now have 100 shares of TGH. I plan to write covered calls against my position to generate extra income. I expect that the share price of TGH won't have any real upside in the short term due to low rental rates. The dividend however seems sustainable (see my article on Seeking Alpha). If the valuation multiple returns to the historical average in a few years, total return should more than offset the extra risk.
I'll get up another post in a few days about my possible option purchase.
I'll get up another post in a few days about my possible option purchase.
Nice buy....thanks for sharing. We've added your recent buy to our Collection. :)
ReplyDeleteBest wishes and continued success on your personal journey! AFFJ
Hi AFFJ, thanks for stopping by. Are you going to write an article about the recent buys from fellow DGI's?
DeleteWow, TGH has been on decline for a while.
ReplyDeleteHopefully they will be able to sustain their dividends, because a 80%+ payout ratio in a few years doesn't sound too good to me.
Still a nice purchase. Good job!
Best wishes, DfS
Hi DfS, well the 80% payout mentioned in my article is like a worst-case scenario (no container growth, 5yr stretch of decade low rental rates). So I guess we should be all right all though I agree this purchase is a little more risky than let's say KO or something like that.
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