After looking at AMERCO’s (NASDAQ:UHAL) latest earnings update (31 March 2018), I found it helpful to revisit the company’s performance in the past couple of years and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is an important aspect. In this article I briefly touch on my key findings. Check out our latest analysis for AMERCO

How Did UHAL’s Recent Performance Stack Up Against Its Past?

For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method allows me to analyze various companies on a similar basis, using the most relevant data points. For AMERCO, its latest earnings (trailing twelve month) is US$790.58M, which, against the prior year’s level, has moved up by a substantial 98.43%. Given that these values may be relatively short-term thinking, I’ve created an annualized five-year figure for UHAL’s earnings, which stands at US$367.22M This shows that, on average, AMERCO has been able to gradually raise its net income over the past couple of years as well.

What’s enabled this growth? Well, let’s take a look at whether it is merely due to an industry uplift, or if AMERCO has experienced some company-specific growth. Over the past few years, AMERCO expanded its bottom line faster than revenue by effectively controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the US transportation industry has been growing its average earnings by double-digit 43.92% in the prior twelve months, and 10.81% over the past half a decade. This suggests that any tailwind the industry is deriving benefit from, AMERCO is able to amplify this to its advantage.

What does this mean?

While past data is useful, it doesn’t tell the whole story. While AMERCO has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research AMERCO to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for UHAL’s future growth? Take a look at our free research report of analyst consensus for UHAL’s outlook.

2. Financial Health: Is UHAL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.