Triton International Corporate Bonds and Leverage Analysis
| TRTNDelisted Stock | USD 84.47 0.12 0.14% |
Triton International holds a debt-to-equity ratio of 2.534. With a high degree of financial leverage come high-interest payments, which usually reduce Triton International's Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Triton International's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Triton International's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Triton Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Triton International's stakeholders.
For most companies, including Triton International, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Triton International Group, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Triton International's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Triton |
Given the importance of Triton International's capital structure, the first step in the capital decision process is for the management of Triton International to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Triton International Group to issue bonds at a reasonable cost.
Triton International Debt to Cash Allocation
As Triton International Group follows its natural business cycle, the capital allocation decisions will not magically go away. Triton International's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors.
Triton International Group currently holds 8.07 B in liabilities with Debt to Equity (D/E) ratio of 2.53, implying the company greatly relies on financing operations through barrowing. Triton International has a current ratio of 21.72, suggesting that it is liquid enough and is able to pay its financial obligations when due. Note, when we think about Triton International's use of debt, we should always consider it together with its cash and equity.Triton International Assets Financed by Debt
Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the Triton International's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Triton International, which in turn will lower the firm's financial flexibility.Triton International Corporate Bonds Issued
Triton International issues bonds to finance its operations. Corporate bonds make up one of the most significant components of the U.S. bond market and are considered the world's largest securities market. Triton International uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt.
Understaning Triton International Use of Financial Leverage
Leverage ratios show Triton International's total debt position, including all outstanding obligations. In simple terms, high financial leverage means that the cost of production, along with the day-to-day running of the business, is high. Conversely, lower financial leverage implies lower fixed cost investment in the business, which is generally considered a good sign by investors. The degree of Triton International's financial leverage can be measured in several ways, including ratios such as the debt-to-equity ratio (total debt / total equity), or the debt ratio (total debt / total assets).
Triton International Limited engages in the acquisition, leasing, re-leasing, and sale of various types of intermodal containers and chassis to shipping lines, and freight forwarding companies and manufacturers. The company was founded in 1980 and is based in Hamilton, Bermuda. Triton International operates under Rental Leasing Services classification in the United States and is traded on New York Stock Exchange. It employs 237 people. Please read more on our technical analysis page.
Pair Trading with Triton International
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Triton International position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Triton International will appreciate offsetting losses from the drop in the long position's value.Moving together with Triton Stock
Moving against Triton Stock
| 0.89 | MRK | Merck Company Fiscal Year End 6th of February 2025 | PairCorr |
| 0.8 | JNJ | Johnson Johnson Fiscal Year End 28th of January 2025 | PairCorr |
| 0.69 | PFE | Pfizer Inc Fiscal Year End 4th of February 2025 | PairCorr |
| 0.53 | PG | Procter Gamble | PairCorr |
The ability to find closely correlated positions to Triton International could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Triton International when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Triton International - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Triton International Group to buy it.
The correlation of Triton International is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Triton International moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Triton International moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Triton International can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out World Market Map to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in estimate. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Consideration for investing in Triton Stock
If you are still planning to invest in Triton International check if it may still be traded through OTC markets such as Pink Sheets or OTC Bulletin Board. You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. Please note that delisted stocks are often considered to be more risky investments, as they are no longer subject to the same regulatory and reporting requirements as listed stocks. Therefore, it is essential to carefully research the Triton International's history and understand the potential risks before investing.
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.