investingfromtheright

I am retired and take educated guesses on all things financial.

May 05, 2010

May 5, 2010: Why Rent When You Can Buy? Four Interesting Rental Companies

In most instances, rental companies deal in aircraft, vehicles and rent-to-own home basics. I have never found these areas to be fertile ground for my investments. By chance, I screened some niche rental players that usually fall under the radar screen, yet are unique, large enough to warrant confidence that trading volume and stable management present, and pay a noteworthy dividend.

Here are four companies that you may want to explore:

McGrath RentCorp (MGRC): Trading at $24.80 with a 52-week trading range of $17.01-27.41, a market cap of $595m and yielding 3.58%, McGrath RentCorp is a provider of rental modular buildings for classroom and office space. MGRC also rents electronic test equipment for general purpose and communication needs, and liquid and solid containment tanks and boxes (including hazardous material). It also sells products they rent, much of it through MRGC's Enviroplex subsidiary.

Electra Rent Corporation (ELRC): Trading at $14.35 with a 52-week trading range of $8.24-14.95, a market cap of $345m and yielding 4.21%, Electro Rent is engaged in the rental, lease and sale of electronic equipment, primarily test and measurement data and personal computer data (DP) equipment. A significant portion of ELRC's portfolio of equipment is rented or leased to the aerospace and defense, semiconductor, electronics and telecommunications industries.

Textainer Group Holdings Ltd.(TGH): Trading at $22.92 with a 52-week trading range of $8.81-24.48, a market cap of $1.1b and yielding 3.89%, Textainer is a holding company of companies involved in the purchase, management, ownership, leasing and disposal of a fleet of intermodal containers. TGH plays all sides of the container niche they have carved for themselves, from working with investors in containers to military management of cargo, and everything in between.

Tal International Group (TAL): Trading at $25.44 with a 52-week trading range of $8.81-26.98, a market cap of $782m and yielding 3.93%, Tal International, founded in 1963, is a lessor of intermodal freight containers. Operating in 37 countries, TAL operations includes the acquisition, leasing, re-leasing and sale of multiple types of intermodel containers which includes dry freight, refrigerated and special containers for heavy and oversized cargo such as construction products. TAL has 702,000 containers (1,140,000 twenty-foot equivalent units or, TEUs) in use at present,which places the company third amongst independent intermodal lessors by fleet size.

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