Textainer Group Holdings Limited (NYSE: TGH) and Fly Leasing Limited (NYSE:FLY) are both small-cap transportation companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitabiliy, dividends, valuation, risk, earnings and institutional ownership.

Volatility & Risk

Textainer Group Holdings Limited has a beta of 2.3, indicating that its share price is 130% more volatile than the S&P 500. Comparatively, Fly Leasing Limited has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Earnings and Valuation

This table compares Textainer Group Holdings Limited and Fly Leasing Limited’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Textainer Group Holdings Limited $486.26 million 1.63 $286.69 million ($0.97) -14.38
Fly Leasing Limited $340.75 million 1.26 -$31.51 million ($0.98) -13.60

Textainer Group Holdings Limited has higher revenue and earnings than Fly Leasing Limited. Textainer Group Holdings Limited is trading at a lower price-to-earnings ratio than Fly Leasing Limited, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

21.6% of Textainer Group Holdings Limited shares are owned by institutional investors. Comparatively, 51.8% of Fly Leasing Limited shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Textainer Group Holdings Limited and Fly Leasing Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Textainer Group Holdings Limited -11.27% -6.01% -1.67%
Fly Leasing Limited -9.21% 11.96% 2.19%

Dividends

Textainer Group Holdings Limited pays an annual dividend of $0.03 per share and has a dividend yield of 0.2%. Fly Leasing Limited does not pay a dividend. Textainer Group Holdings Limited pays out -3.1% of its earnings in the form of a dividend. Textainer Group Holdings Limited has increased its dividend for 5 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Textainer Group Holdings Limited and Fly Leasing Limited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Textainer Group Holdings Limited 0 1 2 0 2.67
Fly Leasing Limited 0 1 5 0 2.83

Textainer Group Holdings Limited currently has a consensus target price of $18.50, suggesting a potential upside of 32.62%. Fly Leasing Limited has a consensus target price of $17.42, suggesting a potential upside of 30.66%. Given Textainer Group Holdings Limited’s higher possible upside, analysts plainly believe Textainer Group Holdings Limited is more favorable than Fly Leasing Limited.

Summary

Textainer Group Holdings Limited beats Fly Leasing Limited on 9 of the 15 factors compared between the two stocks.

About Textainer Group Holdings Limited

Textainer Group Holdings Limited is a holding company. The Company is involved in the purchase, ownership, management, leasing and disposal of a fleet of intermodal containers. The Company operates in three segments: Container Ownership, which owns containers; Container Management, which manages containers on behalf of affiliated and unaffiliated container investors, and provides acquisition, management and disposal services, and total managed containers, and Container Resale, which sells containers from its fleet when they reach the end of their useful lives in marine service, and also purchases and leases or resells containers from shipping line customers, container traders and other sellers of containers. The Company is a lessor of intermodal containers based on fleet size. The Company is also a seller of used containers. The Company’s subsidiaries include Textainer Equipment Management Limited (TEML) and Textainer Limited (TL).

About Fly Leasing Limited

Fly Leasing Limited is engaged in purchasing commercial aircraft, which it leases under multi-year contracts to a range of airlines throughout the world. The Company primarily acquires aircraft by entering into purchase and leaseback transactions with airlines for new aircraft; purchasing portfolios, which consists of aircraft of various types and ages, and acquiring individual aircraft. As of December 31, 2016, the Company had 76 aircraft in its portfolio, of which 75 were held for operating lease and one was recorded as an investment in finance lease. As of December 31, 2016, its portfolio included 65 narrow-body passenger aircraft (including one freighter) and 11 wide-body passenger aircraft (including two freighters). Its aircraft are leased under multi-year contracts to various group of airlines in Europe; Asia and South Pacific; Mexico, South and Central America; North America, and Middle East and Africa. Its portfolio includes aircrafts, such as B737-700 and A320-200.

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