I’ve been watching Amerco (UHAL) for a few years now. It is a high-quality company with a dominant market position in the do-it-yourself moving and self-storage business. One could even argue it holds an unassailable position. You might recognize Amerco for its primary business, U-Haul.
For the last few years, Amerco has resumed buying back shares and paying out one-time special dividends around the end of the calendar year. Sometimes the special dividend is $1 per share and some years it is more. The inconsistency of the size of the dividend plus the minuscule amount paid based on the percentage of its earnings has kept us from adding Amerco to our Dividend Growth portfolio.
But things might be changing.
First Amerco’s (UHAL) share price is coming down and nearing a level we would like to buy it at. Secondly, and most importantly, it looks like Amerco is starting to pay a consistent quarterly dividend.
Amerco has a lot of cash on hand and generates a significant amount of free cash flow. Amerco could continue to pay and grow a consistent quarterly dividend but management, as always, has played this a little close to their chest. Management has not come out and said they would like to pay a consistent quarterly dividend.
From the Q2 2016 Earnings call.
At the top of the list is reinvestment, and as you can see from our numbers, we are hard at that, but we do continue to accumulate cash. We did take on some excess cash this quarter from a refinancing. We have shown — we have recently done dividends, but the focus of the organization right now continues to be in reinvesting.
Not the definitive answer I would like but actions speak louder than words so I”ll continue to watch Amerco’s management.