John Barrette - Sunbelt Digital Media
It's one of those little-known financial facts that most miss when headlines blare about a sagging stock market: Companies in your own backyard can chug along and pay dividends.
Case in point: U-Haul, the North American "move yourself" and storage firm with outposts in every city; it is based in Arizona, but actually is the biggest part of a parent company called AMERCO that is headquartered in Reno.
AMERCO's common stock trades on the NASDAQ under the symbol UHAL. The U-Haul headquarters aren't in Nevada. But Nevada-based AMERCO's Series A, 8.5 percent Preferred Stock trades on the NYSE under the symbol AOPRA, and Friday marked another quarterly dividend deadline.
Shareholders of record that day get $.53125 per share. Do the math: Someone with 1,000 shares gets $531 plus in quarterly dividends payable Dec. 1. Happy holidays. Figure the dividend over a year and it's more than 10 percent if the stock price doesn't wobble.
Contacting AMERCO's office to ask questions got a reporter a referral to Arizona. Stopping by the building in which AMERCO is at Reno's Airport Gardens, a short walk from Reno's airport terminal, determined there were two offices -- No. 100 marked AMERCO Administration, No. 115 listed as AMERCO's Tax Department.
So a call went out to the U-Haul headquarters in Arizona to determine how the company has fared historically. Does the firm do all right?
"It seems like we have through most of the good and bad times," said Joanne Fried, director of media and public relations. She said it's too early to tell how the company will do in this recession. Barron's, however, reported earlier this month that revenues were flat and competition keen, so management cautious.
Fried also said she couldn't speak about stock-related matters and the investor relations person wasn't in the Arizona office.
So a call went to Mark Shoen, vice president of U-Haul who owns shares of the AMERCO preferred stock. He seemed a person who might know more than the media spokesperson about his firm, but he didn't return the call. No such luck. Someone in his office said he wasn't in right then and took a message for a possible call back.
Shoen, a member of the ownership family, purchased 85,000 shares on the open market and received an award of another 57,200 shares in October, according to MarketWatch, the online presence for the Wall Street Journal.
On Friday, UHAL common shares closed the trading day at $40.23, down $2.15, while AMERCO's preferred stock AOPRA (AO.A on some websites) came in with a 91-cents upward move to reach $19.06.
Not surprisingly, the preferred stock moved higher with folks getting in on the dividend before the quarter ended. For perspective, the AOPRA trailing 52-week low and high were $17.56 and $24.78, while UHAL's common shares posted a 52-week range of $28.93 and $79.86.
In other words, the preferred share price hasn't wobbled a lot while the common shares did have more volatility over time.
Reno-based AMERCO's U-Haul International Inc. accounted for some 90 percent of the business's fiscal 2008 take, according to Reuters; other subsidiaries are Republic Western Insurance Co., Oxford Life Insurance Co., and SAC Holdings. These handle property and casualty insurance, life and health policies, and real estate.
U-Haul has 21,000 trucks, mostly new, 387,000 storage rooms with 34 million square feet of space and operates in 49 states, plus 10 Canadian provinces. It operates 1,450 company-owned outlets and has 14,500 dealers. Market capitalization of the firm is about $800 million.
With earnings down and revenues flat in the latest quarter, the jury is still out on how AMERCO business will do through a recession if it deepens. Ian Gilson, an institutional analyst with Zacks Investment Research indicated the firm could face headwinds.
He said the firm is selling used trucks into a down market, having replaced the fleet earlier this year, which is a problem. He also said U-Haul is in a competitive space, which makes any plus from more moving and storage in times of economic upheaval a minimal positive. However, his blog still rates the company's common stock a buy.
Gilson didn't address the preferred stock either in a phone call or on his blog, but the dividend and insider interest isn't lost on investors seeking income.
