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Is strong customer demand a thing of the past for the container companies? TAL International Group Inc. (TAL) doesn't think so as it expects 2012 to mirror the strong results of 2011. This Zacks #2 Rank (Buy) continues to be cheap, with a forward P/E of just 9.2.

TAL International is at the forefront of the global economy because it acquires and leases intermodal freight containers and chassis to customers around the world. If shipping is picking up, the company will see it.

Its fleet consists of approximately 1,010,000 containers and related equipment. It operates 17 offices in 11 countries and about 225 third party container depot facilities in 39 countries.

TAL Beat Again in the Fourth Quarter

On Feb 13, TAL International kept its earnings surprise streak alive by beating the Zacks Consensus Estimate by 5.2%. It was the 8th straight earnings surprise in a row.

Earnings per share were $1.02 compared to the consensus of 97 cents.

Leasing revenue spiked 31% to $124.1 million from $94.5 million in the fourth quarter of 2010.

Because of increased demand, TAL invested heavily in new container purchases and sale-leaseback transactions in 2011. The company spent $775 million and bought 270,000 ETU of dry containers and about 13,000 TEU of refrigerated containers. The result was a 24.9% increase in revenue earning assets in 2011.

Average utilization rates continued to be near record highs in the quarter at 98.6%. For the year, it averaged 98.7%.

Will the Good Times Continue In 2012?

TAL is still bullish about 2012. Leasing company depot inventories of used containers are still low. Many of TAL's customers are reluctant to purchase their own containers so they will continue to lease. Supply should remain tight.

TAL expects its utilization rates to remain near historic highs in 2012.

The company does caution that a severe global recession and potential major customer defaults remain a risk.

2012 Zacks Consensus Estimate Rises

The analysts liked what they heard in the earnings report because 4 estimates for 2012 moved higher in the last 30 days while only 1 was revised lower.

This pushed the Zacks Consensus Estimate up 7 cents to $3.90.

That is basically flat earnings growth because the company also earned $3.90 in 2011.

Big Dividend

Many investors buy TAL for its dividend, which is very juicy and currently yielding 5.8%.

The company gave no indication that the dividend was in any danger of being cut. To the contrary, the company increased its dividend in the fourth quarter to 55 cents per share. It is payable on Mar 29 to shareholders of record as of Mar 8.

Still a Value Stock

TAL was a value stock throughout 2011 and it continues to be so in 2012 even though shares are near multi-year highs.

Its forward P/E of just 9.2 is well under that of its peers at 13.2.

The company also has a price-to-book ratio of 2.1. A P/B ratio under 3.0 usually indicates value.

So far in 2012, the demand for containers doesn't appear to be slowing. TAL remains an attractive value play which rewards shareholders with a solid dividend.

This Week's Value Zacks Rank Buy Stocks

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In a sign of better economic times, the future for railcar manufacturers looks bright. FreightCar America, Inc. (RAIL) is expected to grow earnings by over 700% in 2012 as the eastern coal car replacement cycle continues. This Zacks #1 Rank (Strong Buy) is one of those rare stocks that has both growth and value. It has a price-to-book ratio of just 1.7. Read the full article.

2012 still looks hot for growth in global infrastructure. Valmont Industries, Inc. (VMI) recently reported a record 2011 as irrigation, utilities and coatings remained strong. This Zacks #1 Rank (Strong Buy) is also a value stock with a forward P/E of 14.7. Read the full article.

The railcar transportation companies have started off 2012 on a hot note. Trinity Industries, Inc. (TRN) is expected to grow earnings by the double digits as the backlog continues to grow on its railcar and barge businesses. This Zacks #1 Rank (strong buy) is a rare stock that has both strong earnings growth and is still a value stock with a forward P/E of 13.8. Read the full article.

Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.

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