Stock Analysis: Trinity Industries

landscape photography of train railway

Source: Unsplash 

Trinity Industries Inc goes by the ticker symbol TRN and is in the industrials business sector as a railroad company. This is my third report on Trinity Industries for this Vista folio. Maybe this third chance will get it selected.

Trinity Industries Inc. sells and leases railroad products and railcar maintenance services in North America. 

The company operates under the name TrinityRail in three main segments: railcar leasing and management services, which owns railcars and provides fleet management and administration services; rail products, which builds, sells, and modifies freight and tank railcars and their components; and all other, which sells highway products such as guardrail and other highway barriers. 

Customers include railroads, leasing companies, and shipping companies in the industries of agriculture, construction, consumer products, energy, and chemicals.

It sells or leases products and services through its own sales personnel and independent sales representatives. Trinity Industries, Inc. was incorporated in 1933 and is headquartered in Dallas, Texas.

Three key data points gauge dividend equities or funds like Trinity Industries Inc:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money. 

TRN Price

Trinity's price per share closed at $29.17 yesterday. One year ago its price was $22.19. Thus, price per share grew over 31.5% over the past year as TRN recovered from Covid economic doldrums. 

Should TRN's stock trade in the range of $18 to  $35.00 this next year, its recent $29.17 price might rise by $3.08 to reach $32.25 by June 15, 2022. My estimate corresponds to the median of annual price estimates by five analysts covering TRN.

TRN Dividends

Trinity's most recent quarterly dividend payout of $0.21 is payable July 30th and equates to $0.84 annually which will yield 2.88% based on yesterday's $29.17 closing price. TRN has paid quarterly dividends increasing annually since 2010 (11 years.)

TRN Returns

Adding the $0.84 annual Trinity Industries forward-looking dividend to my $3.08 price upside estimate shows a $3.92 potential gross gain, per share, to be reduced by any costs to trade TRN. At yesterday's $29.17 price per share, $1000 would buy 34 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at a sale and might cost us about $0.29 per share.

Subtract that maybe $0.29 brokerage cost from my estimated $3.92 gross gain per share results in a net gain of $3.63 X 34 shares = $123.42 for a 12.4% net gain on a $991.78 investment.

So it is that Trinity Industries inc shows a possible 12.4% net gain including a 2.88% forward estimated dividend yield. 

Over the next year at this time, a $1000 investment in TRN would generate $28.80 in cash dividends. And a single share bought at yesterday's closing price was $29.17! So, if TRN is your kind of railroad company, the Trinity Industries Inc share price is $0.37 higher than the expected annual dividend income from $1,000 invested. This suggests a pullback in price to about $28 would signal the time to add Trinity Industries Inc to your stock holdings. Be sure to buy once the price dips below the dividend income from $1K invested.

All of the estimates above are speculation based on the past history of Trinity Industries Inc. Only time and money invested in this stock will determine its true worth.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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