company background image
TRN

Trinity Industries NYSE:TRN Stock Report

Last Price

US$22.93

Market Cap

US$1.9b

7D

-2.8%

1Y

-17.9%

Updated

28 Sep, 2022

Data

Company Financials +
TRN fundamental analysis
Snowflake Score
Valuation4/6
Future Growth5/6
Past Performance1/6
Financial Health1/6
Dividends3/6

TRN Stock Overview

Trinity Industries, Inc. provides rail transportation products and services under the TrinityRail name in North America.

Trinity Industries Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Trinity Industries
Historical stock prices
Current Share PriceUS$22.93
52 Week HighUS$35.35
52 Week LowUS$20.94
Beta1.28
1 Month Change-9.83%
3 Month Change-5.33%
1 Year Change-17.90%
3 Year Change28.53%
5 Year Change-33.88%
Change since IPO230.19%

Recent News & Updates

Sep 07

Trinity declares $0.23 dividend

Trinity (NYSE:TRN) declares $0.23/share quarterly dividend, in line with previous. Forward yield 3.9% Payable Oct. 31; for shareholders of record Oct. 14; ex-div Oct. 13. See TRN Dividend Scorecard, Yield Chart, & Dividend Growth.

Aug 25
These 4 Measures Indicate That Trinity Industries (NYSE:TRN) Is Using Debt In A Risky Way

These 4 Measures Indicate That Trinity Industries (NYSE:TRN) Is Using Debt In A Risky Way

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...

Aug 17

There Are Better Options Than Trinity Industries

Trinity Industries' most recent financial performance was fine compared to 2021 but was quite soft when compared to the pre-pandemic period. Although TRN shares are cheaper, they're not cheap enough to make this a compelling investment in my view. Trinity demonstrates that in the world of investing, everything's relative. This stock is an "also ran" when compared to alternatives. It’s been about 3 months since I recommended investors continue to avoid Trinity Industries, Inc. (TRN) in an article with the very creative title “Continue To Avoid Trinity Industries Inc.” Since then, the shares have returned about 10.5% against a gain of 8.2% for the S&P 500. The company has reported financials since, so I thought I’d review the name yet again. I’ll decide whether or not it makes sense to buy based on the most recent financial results, and the current valuation. We’re all busy. I’m sure that all of you are busy working out which supermodel you’re going to take out this weekend, or which high end resort you’re going to move to over the winter. For my part, I’ve got hours of “Days of Our Lives” to catch up on. For that reason, I want to offer you this time saving “thesis statement” paragraph, where I offer the gist of my thinking in a quick, easy to read summary. I think investors would be wise to continue to eschew Trinity Industries. The company has performed well in 2022 relative to 2021, but performance is soft when compared to the pre-pandemic period. Although the shares are cheaper, they’re not objectively cheap and that matters in a world where investors are offered alternatives. I think this stock is an “also ran” when compared to the cash flows of the 10-year Treasury Note, and the exposure to the freight car refit of FreightCar America. Additionally, in my prior work on this name, I concluded that the dividend is barely covered, and that management wasted over $833 million of investor capital on a buyback, and nothing’s happened in the interim to change my views on these scores. In the domain of investing, everything’s relative, and I think Trinity remains a relatively poor choice for investors at the moment. Financial Snapshot Before getting into the financial summary proper, I think it would be helpful to summarize my take on this company so far. In my most recent article on this name, I determined that the shares were less attractive on a risk adjusted basis than a 10-year Treasury Note, as the latter offered virtually identical cash flows to the dividends, at far less risk. I also concluded that the dividend is barely covered. Finally, I decided that the $833.4 million of investor capital spent on buybacks was an inferior use of capital, and it would have been better if management used that cash to pay down debt. That brings us up to speed in general, and I would point readers to my two most recent articles on this name for more detail. Turning to the most recent period, it’s obvious that the company is improving in some ways. For instance, compared to 2021, revenue for the first six months of 2022 was ~43% higher, and operating profit is up by just under 17%. Additionally, income from continuing operations has swung from a loss of ~$6.7 million to $35.2 million. All that said, net income was off by $13 million, or 81%. The chief culprit for the turnaround in net income is the fact that net income from discontinued operations swung from a $13.9 million positive in 2021 to a $10.3 million negative in 2022. Additionally, the company took a $5.7 million net loss on the sale of discontinued operations during the most recent period. Thus, I don’t think the drop in net income from last year to this represents a pernicious, ongoing problem for the firm. At the same time, the capital structure has continued to deteriorate, with long term debt up by 4.75%, or $250.9 million. Also, I’ve begun to compare the most recent period to the pre-pandemic periods in order to offer greater context. After all, it’s one thing to be stronger than a period beset by a global pandemic. It’s another to be stronger than the pre-pandemic period. When we expand our view and compare the most recent six months to the same period in 2019, a much different picture emerges. Revenue during the first half of the current year is about 34% softer than it was in 2019, and net income is off by $63.9 million, or 95%. At the same time the capital structure has improved, as evidenced by the fact that long term debt is about $923 million higher now than it was in 2019. In my view the company has not fully recovered from the pandemic, as evidenced by the fact that 2022 performance is far softer than 2019 performance. Given all of the above, I’d need to see the shares trading at a significant discount before I buy. Trinity Financials (Trinity Industries investor relations) The Stock Since last I checked it seems that I've just experienced yet another bump in followers, which is simultaneously flattering and confusing. Anyway, welcome. You new people haven't been exposed to my thoughts about the difference between a company and a stock, so welcome to the party. I am of the view that the business and the stock are very different things, and as such, we need to consider each of them separately when making a buy or sell decision. I'm of the view that a reasonably strong company can be a terrible investment at the wrong price, while a struggling company can be a decent investment if you pick it up at a sufficient discount to intrinsic value. Another way to conceive of this idea is that business is an organization that buys a number of inputs, performs value-adding activities to those, and sells the results at a profit. The stock, on the other hand, is a traded instrument that reflects the crowd's aggregate belief about the long-term prospects for a given company. If you've invested in stocks previously, you may have noticed that the crowd can be capricious and has a tendency to drive prices up and down relatively frequently. Added to that is the volatility induced by the crowd's views about a given sector. Greenbrier, FreightCar America, and Trinity, may go up and down together, for instance, after an analyst offers commentary on only one of these. Additionally, a company's stock can be buffeted by our collective view about "stocks" as an asset class, and we see that the stock is often a poor proxy for what's going on at the firm. This is frustrating in some ways, but it also represents opportunity for us. If we can spot discrepancies between the price and likely future results, we'll do well over time. It's typically the case that the lower the price paid for a given stock, the greater the investor's future returns. In order to buy at these cheap prices, you need to buy when the crowd is feeling particularly down in the dumps about a given name. In my world, "down in the dumps" means "cheap." Those who read my stuff regularly know that I measure the cheapness of a stock in a few ways, ranging from the simple to the more complicated. On the simple side, I track multiples of price to some measure of economic value, like earnings, free cash flow, book value, and the like. Ideally, I want to see a company trading at a discount to both the overall market and its own history. When I last reviewed Trinity, I complained about the fact that the stock was trading at a price to sales ratio of about 2.15 times, price to book of 2.55 times, and sported a dividend yield of about 2.73%. Fast forward to the present and things look slightly better at the moment, per the following: TRN data by YCharts

Shareholder Returns

TRNUS MachineryUS Market
7D-2.8%-2.5%-2.0%
1Y-17.9%-17.4%-20.3%

Return vs Industry: TRN exceeded the US Machinery industry which returned -19.9% over the past year.

Return vs Market: TRN exceeded the US Market which returned -22.1% over the past year.

Price Volatility

Is TRN's price volatile compared to industry and market?
TRN volatility
TRN Average Weekly Movement5.0%
Machinery Industry Average Movement5.4%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: TRN is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: TRN's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19335,845E. Savagehttps://www.trin.net

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.

Trinity Industries Fundamentals Summary

How do Trinity Industries's earnings and revenue compare to its market cap?
TRN fundamental statistics
Market CapUS$1.88b
Earnings (TTM)US$56.40m
Revenue (TTM)US$1.78b

33.3x

P/E Ratio

1.1x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
TRN income statement (TTM)
RevenueUS$1.78b
Cost of RevenueUS$1.44b
Gross ProfitUS$344.30m
Other ExpensesUS$287.90m
EarningsUS$56.40m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.69
Gross Margin19.33%
Net Profit Margin3.16%
Debt/Equity Ratio440.9%

How did TRN perform over the long term?

See historical performance and comparison

Dividends

4.0%

Current Dividend Yield

143%

Payout Ratio

Does TRN pay a reliable dividends?

See TRN dividend history and benchmarks
When do you need to buy TRN by to receive an upcoming dividend?
Trinity Industries dividend dates
Ex Dividend DateOct 13 2022
Dividend Pay DateOct 31 2022
Days until Ex dividend13 days
Days until Dividend pay date31 days

Does TRN pay a reliable dividends?

See TRN dividend history and benchmarks
We’ve recently updated our valuation analysis.

Valuation

Is TRN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for TRN?

Other financial metrics that can be useful for relative valuation.

TRN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue4.3x
Enterprise Value/EBITDA17.8x
PEG Ratio0.4x

Price to Earnings Ratio vs Peers

How does TRN's PE Ratio compare to its peers?

TRN PE Ratio vs Peers
The above table shows the PE ratio for TRN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average16x
TEX Terex
8.9x7.2%US$2.1b
FSS Federal Signal
22.6x19.4%US$2.3b
GBX Greenbrier Companies
14.5x62.7%US$848.9m
ALG Alamo Group
17.9x16.4%US$1.5b
TRN Trinity Industries
33.3x78.5%US$1.9b

Price-To-Earnings vs Peers: TRN is expensive based on its Price-To-Earnings Ratio (33.3x) compared to the peer average (16x).


Price to Earnings Ratio vs Industry

How does TRN's PE Ratio compare vs other companies in the US Machinery Industry?

Price-To-Earnings vs Industry: TRN is expensive based on its Price-To-Earnings Ratio (33.3x) compared to the US Machinery industry average (18.2x)


Price to Earnings Ratio vs Fair Ratio

What is TRN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

TRN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio33.3x
Fair PE Ratio73.7x

Price-To-Earnings vs Fair Ratio: TRN is good value based on its Price-To-Earnings Ratio (33.3x) compared to the estimated Fair Price-To-Earnings Ratio (73.7x).


Share Price vs Fair Value

What is the Fair Price of TRN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: TRN ($22.93) is trading below our estimate of fair value ($136.6)

Significantly Below Fair Value: TRN is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


Discover undervalued companies

Future Growth

How is Trinity Industries forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

5/6

Future Growth Score 5/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


78.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TRN's forecast earnings growth (78.5% per year) is above the savings rate (1.9%).

Earnings vs Market: TRN's earnings (78.5% per year) are forecast to grow faster than the US market (14.8% per year).

High Growth Earnings: TRN's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TRN's revenue (30.3% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: TRN's revenue (30.3% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if TRN's Return on Equity is forecast to be high in 3 years time


Discover growth companies

Past Performance

How has Trinity Industries performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-54.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: TRN has a large one-off gain of $108.5M impacting its June 30 2022 financial results.

Growing Profit Margin: TRN became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: TRN's earnings have declined by 54.4% per year over the past 5 years.

Accelerating Growth: TRN has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: TRN has become profitable in the last year, making it difficult to compare its past year earnings growth to the Machinery industry (9.4%).


Return on Equity

High ROE: TRN's Return on Equity (5.9%) is considered low.


Discover strong past performing companies

Financial Health

How is Trinity Industries's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: TRN's short term assets ($1.2B) exceed its short term liabilities ($580.0M).

Long Term Liabilities: TRN's short term assets ($1.2B) do not cover its long term liabilities ($6.8B).


Debt to Equity History and Analysis

Debt Level: TRN's net debt to equity ratio (437.2%) is considered high.

Reducing Debt: TRN's debt to equity ratio has increased from 75.8% to 440.9% over the past 5 years.

Debt Coverage: TRN's debt is not well covered by operating cash flow (3.7%).

Interest Coverage: TRN's interest payments on its debt are not well covered by EBIT (0.9x coverage).


Balance Sheet


Discover healthy companies

Dividend

What is Trinity Industries's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


4.01%

Current Dividend Yield

Upcoming Dividend Payment

TodaySep 29 2022Ex Dividend DateOct 13 2022Dividend Pay DateOct 31 202218 days from Ex DividendBuy in the next 13 days to receive the upcoming dividend

Dividend Yield vs Market

Trinity Industries Dividend Yield vs Market
How does Trinity Industries dividend yield compare to the market?
SegmentDividend Yield
Company (Trinity Industries)4.0%
Market Bottom 25% (US)1.6%
Market Top 25% (US)4.6%
Industry Average (Machinery)2.0%
Analyst forecast in 3 Years (Trinity Industries)n/a

Notable Dividend: TRN's dividend (4.01%) is higher than the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: TRN's dividend (4.01%) is low compared to the top 25% of dividend payers in the US market (4.69%).


Stability and Growth of Payments

Stable Dividend: TRN's dividends per share have been stable in the past 10 years.

Growing Dividend: TRN's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (143.1%), TRN's dividend payments are not well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: TRN is paying a dividend but the company has no free cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.5yrs

Average management tenure


CEO

E. Savage (58 yo)

3.83yrs

Tenure

US$5,579,197

Compensation

Ms. E. Jean Savage serves as Director at WestRock Company since January 28, 2022. She serves as President and Chief Executive Officer at Trinity Industries, Inc. since February 17, 2020 and serves as its D...


CEO Compensation Analysis

E. Savage's Compensation vs Trinity Industries Earnings
How has E. Savage's remuneration changed compared to Trinity Industries's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$56m

Mar 31 2022n/an/a

US$50m

Dec 31 2021US$6mUS$850k

US$40m

Sep 30 2021n/an/a

-US$117m

Jun 30 2021n/an/a

-US$124m

Mar 31 2021n/an/a

-US$336m

Dec 31 2020US$7mUS$741k

-US$172m

Sep 30 2020n/an/a

US$2m

Jun 30 2020n/an/a

US$26m

Mar 31 2020n/an/a

US$270m

Dec 31 2019US$267kn/a

US$122m

Sep 30 2019n/an/a

US$144m

Jun 30 2019n/an/a

US$123m

Mar 31 2019n/an/a

US$121m

Dec 31 2018US$94kn/a

US$102m

Compensation vs Market: E.'s total compensation ($USD5.58M) is about average for companies of similar size in the US market ($USD5.58M).

Compensation vs Earnings: E.'s compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: TRN's management team is considered experienced (2.5 years average tenure).


Board Members

Experienced Board: TRN's board of directors are considered experienced (3.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

NYSE:TRN Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
24 Mar 22SellUS$205,140Brian MadisonIndividual6,000US$34.19
22 Feb 22SellUS$107,541,000ValueAct Capital Management, L.P.Company3,780,000US$28.45
08 Nov 21SellUS$68,676,000ValueAct Capital Management, L.P.Company2,360,000US$29.10

Ownership Breakdown

What is the ownership structure of TRN?
Owner TypeNumber of SharesOwnership Percentage
Individual Insiders1,090,8691.3%
General Public7,108,6518.7%
Institutions73,808,92490.0%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 77.04% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
16.42%
Capital Research and Management Company
13,462,094$308.7m-0.32%0.02%
14.99%
BlackRock, Inc.
12,293,803$281.9m34.75%0.01%
10.57%
The Vanguard Group, Inc.
8,666,480$198.7m4.5%no data
7.1%
Dimensional Fund Advisors LP
5,820,137$133.5m-2.04%0.03%
4.21%
Jennison Associates LLC
3,449,846$79.1m27.44%0.07%
3.24%
State Street Global Advisors, Inc.
2,655,447$60.9m2.03%no data
2.38%
Omega Advisors, Inc.
1,950,000$44.7m0%2.83%
2.04%
GAMCO Investors, Inc.
1,675,095$38.4m-1.43%0.16%
1.71%
Jacobs Levy Equity Management Inc
1,402,839$32.2m11.72%0.25%
1.65%
Geode Capital Management, LLC
1,349,561$30.9m-2.99%no data
1.52%
BNY Mellon Asset Management
1,245,232$28.6m-8.07%0.01%
1.25%
Sterling Capital Management LLC
1,024,601$23.5m-1.15%0.35%
1.23%
Charles Schwab Investment Management, Inc.
1,011,620$23.2m-2.28%0.01%
1.06%
Northern Trust Global Investments
870,342$20.0m-18.44%no data
1.02%
Victory Capital Management Inc.
835,609$19.2m-2.64%0.02%
0.89%
Norges Bank Investment Management
727,501$16.7m0%no data
0.87%
StackLine Partners LP
709,491$16.3m-4.49%9.4%
0.86%
Raymond James Financial Inc., Asset Management Arm
706,916$16.2m1.92%0.02%
0.67%
Morgan Stanley, Investment Banking and Brokerage Investments
546,758$12.5m12.2%no data
0.66%
Turtle Creek Management, LLC
544,686$12.5m-0.12%0.53%
0.61%
Royce & Associates, LP
498,342$11.4m-6.44%0.11%
0.59%
Mirae Asset Global Investments Co., Ltd
485,378$11.1m-8.67%0.02%
0.56%
Weiss Multi-Strategy Advisers LLC
457,265$10.5m0%0.31%
0.53%
Principal Global Investors, LLC
433,742$9.9m56.95%0.01%
0.44%
Orchard Capital Management, LLC
357,001$8.2m2.65%2.84%

Company Information

Trinity Industries, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Trinity Industries, Inc.
  • Ticker: TRN
  • Exchange: NYSE
  • Founded: 1933
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Implied Market Cap: US$1.880b
  • Shares outstanding: 82.01m
  • Website: https://www.trin.net

Number of Employees


Location

  • Trinity Industries, Inc.
  • 14221 North Dallas Parkway
  • Suite 1100
  • Dallas
  • Texas
  • 75254-2957
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TRNNYSE (New York Stock Exchange)YesCommon StockUSUSDApr 1972
TTADB (Deutsche Boerse AG)YesCommon StockDEEURApr 1972
TRN *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNApr 1972

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/28 00:00
End of Day Share Price2022/09/28 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.