Financial Analysis: Trinity Industries (TRN) versus Its Rivals

Trinity Industries (NYSE:TRN) is one of 14 public companies in the “TRANS – EQP&LSNG” industry, but how does it contrast to its peers? We will compare Trinity Industries to similar businesses based on the strength of its valuation, dividends, institutional ownership, earnings, risk, profitability and analyst recommendations.

Earnings and Valuation

This table compares Trinity Industries and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Trinity Industries	$2.18 billion	$138.40 million	22.38
Trinity Industries Competitors	$3.78 billion	$360.72 million	6.59

Trinity Industries’ peers have higher revenue and earnings than Trinity Industries. Trinity Industries is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Dividends

Trinity Industries pays an annual dividend of $1.20 per share and has a dividend yield of 4.7%. 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. As a group, “TRANS – EQP&LSNG” companies pay a dividend yield of 1.6% and pay out 20.0% of their earnings in the form of a dividend. Trinity Industries has increased its dividend for 16 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Trinity Industries	3.83%	8.49%	1.25%
Trinity Industries Competitors	10.91%	4.90%	2.78%

Volatility & Risk

Trinity Industries has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500. Comparatively, Trinity Industries’ peers have a beta of 1.22, suggesting that their average share price is 22% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Trinity Industries and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trinity Industries	0	3	0	0	2.00
Trinity Industries Competitors	132	583	1009	66	2.56

Trinity Industries presently has a consensus price target of $27.00, suggesting a potential upside of 5.82%. As a group, “TRANS – EQP&LSNG” companies have a potential upside of 19.41%. Given Trinity Industries’ peers stronger consensus rating and higher probable upside, analysts clearly believe Trinity Industries has less favorable growth aspects than its peers.

Insider and Institutional Ownership

86.6% of Trinity Industries shares are owned by institutional investors. Comparatively, 86.4% of shares of all “TRANS – EQP&LSNG” companies are owned by institutional investors. 2.0% of Trinity Industries shares are owned by company insiders. Comparatively, 10.3% of shares of all “TRANS – EQP&LSNG” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Trinity Industries peers beat Trinity Industries on 10 of the 15 factors compared.

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.