Ian GIlson, CFA
On June 6, 2012
reported is fourth quarter and full year results for fiscal 2012.
The numbers were another record and very close to our estimates, as
The extra day in February had a positive impact on the quarter and
both local and one-way transactions increased. Truck utilization
improved which caused the operating expense ratio improve from
51.2% in the fourth quarter or 2011 to 49.1% in the fourth quarter
of 2012. This has a significant impact on operation income.
Commissions as a percentage of truck rental revenue increased
slightly as slightly less revenue was generated at company owned
stores. The cost of sales expense ratio for the self-moving and
self-storage business increased. A significant amount of revenue is
from the sales of propane (which follows the price of natural gas
and this has been volatile over the last 4 months).
The U-Box business has expanded to all company owned self storage
facilities (between 12,000 to 13,000 locations). This business is
growing rapidly but is not yet large enough for management to
consider it material relative to total revenue.
AMERCO has benefitted from declining interest rates. Both lease
expense and interest expense has been declining over the last few
quarters. With $54 million a quarter of combined lease and interest
expense good financial management has been a positive factor for
At the current price the stock is selling at a lower valuation than
most of its peer group yet it has the highest return on equity. We
believe that the stock will outperform its peer group, and the
overall market, over the next six months. Our valuation methods use
Earnings Before Interest Taxes Depreciation Amortization (EBITDA)
and EBITDA plus Lease expense (EBITDAL) since the company can buy
(using borrowed moneys and generating depreciation) or lease
depending on the lowest cost to the company.
In fiscal 2012 AMERCO paid a special cash dividend of $1.00 a
share. In our opinion the company has the necessary cash generation
to institute a regular cash dividend.
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AMERCO INC (UHAL): Free Stock Analysis Report
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