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Triton (TRTN) Shares Up 42.9% in Past 6 Months: Here's Why

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Triton International Limited (TRTN - Free Report) shares have gained 42.9% of value in the past six months compared with the industry’s 42% surge.

Reasons for Surge

Triton is being aided by gradual increase in trade volumes and container demand. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third quarter. The bottom line surged a remarkable 32.6% in the quarter on a sequential basis.

Moreover, sequential decline in Triton International’s debt is encouraging. At the end of the third quarter, debt, net of unamortized costs, fell to $6.43 billion from $6.57 billion at the end of the second quarter.

We are impressed by Triton International’s commitment to reward shareholders through dividend payouts and share buybacks despite the coronavirus-related adversities. Since the launch of its existing share buyback program in August 2018, the company has bought back more than 12.5 million shares. The company also has a track record of consistent dividend payments. In October, Triton International’s board announced an approximate 10% hike in its quarterly dividend to 57 cents per share (annually: $2.28).

However, the company’s earnings per share and total leasing revenues have declined in the first nine months of 2020 by 16.3% and 4.5% year over year, respectively. The downside was mainly due to coronavirus-induced disruptions. With coronavirus concerns continuing, the company is uncertain about its outlook for 2021.

Zacks Rank & Other Stocks to Consider

Triton International currently carries a Zacks Rank #2 (Buy).

Investors interested in the broader Zacks Transportation sector may also consider Knight-Swift Transportation Holdings (KNX - Free Report) , FedEx Corporation (FDX - Free Report) and Herc Holdings Inc. (HRI - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, FedEx and Herc Holdings is pegged at 15%, 12% and 6.5%, respectively.

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