A classic American brand for you here, with a ton of cash. Headquartered in Reno, NV, U-Haul is one of the most recognizable brands on the road today (not counting the mass-market auto manufacturers, of course). Founded in 1945 with just trailers and a DIY rental business model, U-Haul has grown to over $5.8 billion in FY3/31/2023 revenue and EBITDA of $5.8 billion and $1.9 billion, respectively (~30% margins!). Today, it rents over 375k units across trailers, trucks, other towing devices, and a network of 1,900 storage sites in the US and Canada.

The business is 50.1% owned by Willow Grove Holdings under Ed and Mark Shoen and 4.3% owned by employees in an Employee Stock Ownership Plan (or ESOP). The remaining 46% is publicly traded. With over 50% of the stock owned by self-interested insiders, public shareholders will reap the benefits of the culture of promoting from within, long-term and familial ownership, and a classic American brand.

Regarding liquidation value, the DIY model creates some attractive metrics for bargain hunters.  EV / EBITDA is low at 6.03x (depending on how you slice it, since its cash balance of $4.8 billion skews that metric). Total Long-Term Debt of $6.1 billion and Total Liabilities of $11.6 billion drive elevated 5.93x leverage (net leverage of 0.68x, however) and NLV of -$900mm, but the cash moat, brand, and decentralized model explain away this premium. The Company has 20 mm voting shares (UHAL) and 176mm non-voting (UHAL.B). The Bs have slightly outperformed the As over the last 18 months or so, by 10%.

The Company has gained some value since COVID, with market cap growing from $3.5 billion in 2019 to $5.0 billion as of 3/31/2023 (both statistics per management’s measure of market cap at Fiscal Year End). This growth shows an average annual growth rate of 8.6%, not including the Company’s 0.28% dividend to get you near 9% annual return.

The Company’s well-known brand on the roads, decentralized model, easy customer experience, and convenience of locations (service across 2,200 retail sites, 11 manufacturing facilities, 151 repair sites, and a distribution center) have dug it a wide moat. Its 1,904 storage sites cover almost 1 million units encompassing 81 million square feet – enough to store over 1400 football fields.

The IH opinion is ownership of the stock sees some tailwinds, thanks to the brand and structure of the business. The Company’s business model includes providing quality rental options for DIY movers and storers. It employs over 35,000 employees to support its fleet and brick-and-mortar, and prefers to promote from within rather than grabbing external hires. U-Haul exclusively utilizes Ford and GMC trucks. Similar to the LUV model, limiting Original Equipment Manufacturer suppliers enables UHAL engineers and employees to learn and work on the same equipment daily. U-Haul’s size and reputation enable it to achieve improved pricing for its fleet, not to mention it is able to pit Ford and GM against each other for new equipment bidding. Say what you will about Found On Roadside Dead and Government Motors.

IH believes the ESOP and culture of promoting from within drive its good customer
convenience when renting, consistency, truck availability, and quality of
vehicle. Not only does it have quality retail staff, but it maintains its fleet
with in-house engineering and insurance teams, the former of which is able to
work exclusively on Ford and GMC products, and the latter of which has
supplemented its renters’ insurance included in the core truck business by
adding in more fulsome coverage (life and such), generating 5% of FY23 revenue. And it provides some operating data free of charge.

As a final Easter Egg, if the publicly traded route is not for you, the Company also offers direct investments through its Investors Club. If you want to invest in U-Box containers and dollies (3- and 5-year deals, respectively) in increments of $100, by all means. Unfortunately at the moment they are sold out, but that does not mean opportunities with one of the best DIY movers on the road won’t crop up in the near future. Keep a weather eye.