Contrasting GATX (NYSE:GATX) and Trinity Industries (NYSE:TRN)

GATX (NYSE:GATX) and Trinity Industries (NYSE:TRN) are both mid-cap transportation companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Valuation & Earnings

This table compares GATX and Trinity Industries”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GATX	$1.59 billion	3.51	$284.20 million	$8.74	17.88
Trinity Industries	$3.08 billion	0.72	$138.40 million	$1.14	24.05

GATX has higher earnings, but lower revenue than Trinity Industries. GATX is trading at a lower price-to-earnings ratio than Trinity Industries, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares GATX and Trinity Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GATX	19.13%	12.52%	2.49%
Trinity Industries	3.83%	8.49%	1.25%

Dividends

GATX pays an annual dividend of $2.44 per share and has a dividend yield of 1.6%. Trinity Industries pays an annual dividend of $1.20 per share and has a dividend yield of 4.4%. GATX pays out 27.9% of its earnings in the form of a dividend. Trinity Industries pays out 105.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. GATX has increased its dividend for 15 consecutive years and Trinity Industries has increased its dividend for 16 consecutive years. Trinity Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

GATX has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, Trinity Industries has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500.

Institutional and Insider Ownership

93.1% of GATX shares are owned by institutional investors. Comparatively, 86.6% of Trinity Industries shares are owned by institutional investors. 2.2% of GATX shares are owned by insiders. Comparatively, 2.0% of Trinity Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for GATX and Trinity Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GATX	0	2	1	0	2.33
Trinity Industries	0	2	0	0	2.00

GATX currently has a consensus price target of $167.6667, indicating a potential upside of 7.28%. Trinity Industries has a consensus price target of $27.50, indicating a potential upside of 0.29%. Given GATX’s stronger consensus rating and higher probable upside, research analysts plainly believe GATX is more favorable than Trinity Industries.

Summary

GATX beats Trinity Industries on 12 of the 17 factors compared between the two stocks.

About GATX

GATX Corporation, together its subsidiaries, operates as railcar leasing company in the United States, Canada, Mexico, Europe, and India. It operates through three segments: Rail North America, Rail International, and Portfolio Management. The company leases tank and freight railcars, and locomotives for petroleum, chemical, food/agriculture, and transportation industries. It also offers maintenance services, including the interior cleaning of railcars, routine maintenance and repair of car body and safety appliances, regulatory compliance works, wheelset replacements, interior blast and lining, exterior blast and painting, and car stenciling services. In addition, the company manufactures commercial aircraft jet engines and leases aircraft spare engines; and owns and manages tank containers that are leased to chemical, industrial gas, energy, food, cryogenic and pharmaceutical industries, and tank container operators, as well as provides tank container sourcing, remarketing, and inspection and maintenance services. As of December 31, 2023, it owned and operated a fleet of approximately 148,500 railcars; 493 four-axle and 30 six-axle locomotives; 399 aircraft spare engines; and 23,931 tank containers. GATX Corporation was founded in 1898 and is headquartered in Chicago, Illinois.

About Trinity Industries

Trinity Industries, Inc. provides rail transportation products and services under the TrinityRail name in North America. It operates in two segments, Railcar Leasing and Management Services Group, and Rail Products Group. The Railcar Leasing and Management Services Group segment leases freight and tank railcars; originates and manages railcar leases for third-party investors; and provides fleet maintenance and management services. As of December 31, 2023, it had a fleet of 109,295 railcars. This segment serves industrial shipper and railroad companies operating in agriculture, construction and metals, consumer products, energy, and refined products and chemicals markets. The Rail Products Group segment manufactures freight and tank railcars for transporting various liquids, gases, and dry cargo; and offers railcar maintenance and modification services. This segment serves railroads, leasing companies, and industrial shippers of products in the agriculture, construction and metals, consumer products, energy, and refined products and chemicals markets. It sells or leases products and services through its own sales personnel and independent sales representatives. The company was incorporated in 1933 and is headquartered in Dallas, Texas.