An Update on My Top Dividend Stock for 2013: Textainer Group Holdings Limited (TGH)

CEO of the aforementioned DryShips, George Economou, recently summed up how his company — and many others — is now responding: “The reduction or elimination of CAPEX has become a top priority .” In other words, “We’re eliminating our costs wherever we can.”

This is important to note because Textainer is basically taking the opposite approach. The top of the company’s latest release boasts that the company spent $1.2 billion in 2012 building  out its fleet.

Over the course of the year, the number of intermodal carrriers under the company’s control increased 12.4%. And, whereas last year, Textainer owned 58.6% of all the containers under its control, that number skyrocketed to 72.7%.

This makes the company somewhat more vertically integrated. During boom times, it will do better, as the cost of managing containers that it owns is lower than leasing them. But during bust times, the company will either have to mothball, or sell those containers to raise funds. The key to investing is figuring out where that market might be.

What’s a Fool to do?
Though I’ve been intent on buying shares for some time now, I haven’t gotten around to doing so. Rest assured, it’s on my list of things to do — and I believe Textainer is a good bet right now.

The article An Update on My Top Dividend Stock for 2013 originally appeared on Fool.com and is written by Brian Stoffel.

Fool contributor Brian Stoffel has no position in any stocks mentioned. The Motley Fool recommends Textainer Group (NYSE:TGH).

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