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Last update on 2024-06-07

Amerco (UHAL) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Find out Amerco's (UHAL) financial performance for 2023 using Piotroski Score. Explore detailed insights on profitability, liquidity, and asset management.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 6

We're running Amerco (UHAL) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
1
Current Ratio is growing?
0
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
0

The Piotroski F-Score is used to measure a company's financial strength, scored out of 9 based on profitability, liquidity, and efficiency. Amerco (UHAL) has a Piotroski Score of 6. Here’s a breakdown of its criteria: Profitability: UHAL has a positive net income ($924m) and cash flow ($1.7bn), but a declining ROA. Cash flow exceeds net income, which is good. Liquidity: Leverage has decreased slightly, indicating improved debt management, though the current ratio wasn't specified. Outstanding shares were stable. Efficiency: Gross margin increased, but asset turnover ratio decreased, showing less sales per asset unit.

Insights for Value Investors Seeking Stable Income

With a 6 out of 9 Piotroski F-Score, Amerco (UHAL) shows strengths in profitability with consistent positive net income and cash flows, and decent leverage management. However, its declining ROA and asset turnover ratio raise concerns. If you're looking for safe, undervalued investments, UHAL might be worth considering, but be cautious about inefficiency in asset utilization and whether they can maintain this performance.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Amerco (UHAL)

Company has a positive net income?

Net income is the company's total earnings and an indicator of overall profitability. A positive net income adds 1 point in the Piotroski F-Score.

Historical Net Income of Amerco (UHAL)

The net income for Amerco (UHAL) in 2023 stands at $924,472,000, which is indeed positive and thus adds a point to the Piotroski F-Score. Observing the historical data, it's apparent that UHAL has exhibited a trend of positive net income over the recent years, with net income peaking at $1,124,362,000 in 2022. This healthy performance is indicative of the company's capacity to generate profit consistently over the last decade. Therefore, this trend can be seen as favorable, contributing positively to its overall financial health.

Company has a positive cash flow?

Cash Flow from Operations (CFO) measures the cash generated by a company's typical business operations and is critical for long-term sustainability.

Historical Operating Cash Flow of Amerco (UHAL)

In 2023, Amerco (UHAL) reported a positive CFO of $1,729,610,000, reflecting a substantial ability to generate cash from core business operations. Over the last 20 years, starting with no reported CFO values till 2012 and growing from $759,099,000 in 2015 to $1,729,610,000 in 2023, the trend is strongly upward, indicative of consistent operational strength. This results in a 1 point addition in the Piotroski Score, signaling robust operational efficiency.

Return on Assets (ROA) are growing?

ROA (Return on Assets) measures the company's profitability in relation to its total assets. It is important as it gives insight into how efficiently a company utilizes its assets to generate profit.

Historical change in Return on Assets (ROA) of Amerco (UHAL)

The ROA for Amerco (UHAL) declined from 0.0704 in 2022 to 0.0522 in 2023. This trend indicates a decrease in the company's efficiency in generating profit from its assets, resulting in 0 points for this criterion. In comparison, the industry's median ROA has been considerably higher, standing at 0.4056 for 2023. This underperformance in ROA suggests that Amerco's asset utilization lags significantly behind its industry peers, which could be alarming for investors. Over the last two decades, Amerco has exhibited fluctuating metrics; its operating cash flow peaked recently at nearly $1.73 billion, highlighting a possible disparity in asset efficiency relative to the industry norm due to various operational inefficiencies or macroeconomic headwinds impacting the company.

Operating Cashflow are higher than Netincome?

The criterion is assessing whether Amerco's (UHAL) operating cash flow is higher than its net income, which is important because it indicates strong cash generation capabilities.

Historical accruals of Amerco (UHAL)

For 2023, Amerco's (UHAL) Operating Cash Flow of $1,729,610,000 is indeed higher than its Net Income of $924,472,000. This is a positive trend and earns 1 point in the Piotroski score. Over the last 10 years, the company's operating cash flow has consistently been strong, generally exceeding net income, suggesting robust cash generation. Such a trend indicates management's ability to transform profit into actual cash, making it less likely to manipulate earnings.

Liquidity of Amerco (UHAL)

Leverage is declining?

Change in Leverage is a critical factor as it reflects a firm's financial structure adjustments, risk, and operational stability.

Historical leverage of Amerco (UHAL)

Based on the given data, Amerco's leverage increased marginally from 0.3524 in 2022 to 0.3407 in 2023. This minute decrease indicates the company's effort to possibly reduce dependency on debt for its operations. Over the past two decades, AMERCO's leverage ratio has shown substantial variability with spikes around 2020-2022, peaking at 0.3524. 2023's marginal reduction could signal a positive trend toward stabilizing and responsibly managing debt, garnering 1 point as per the Piotroski criteria.

Current Ratio is growing?

Explain the criterion for Amerco (UHAL) and why it is important to consider

Historical Current Ratio of Amerco (UHAL)

The current ratio measures a company's ability to pay short-term liabilities with short-term assets. It is a critical indicator of liquidity. A higher current ratio implies stronger liquidity and financial health.

Number of shares not diluted?

The criterion measures whether the company is issuing new shares or buying back stocks, which can impact shareholder equity.

Historical outstanding shares of Amerco (UHAL)

The Outstanding Shares for Amerco (UHAL) have remained constant at 196,077,880 between 2022 and 2023. Therefore, there has neither been an increase nor a decrease in Outstanding Shares, resulting in a score of 0 for this criterion. Over the last 20 years, the company’s shares have fluctuated with a notable dip to zero in the years 2015 and 2016, indicating some form of stock restructuring or buyback activity during those periods. However, the constancy in recent years suggests stability in the company's share issuance practices. This stability can be seen as a neutral indicator, as neither dilutive activities nor share buybacks have affected the shares outstanding.

Operating of Amerco (UHAL)

Cross Margin is growing?

Gross margin reflects the efficiency of a company in managing its production costs and is a key indication of its profitability.

Historical gross margin of Amerco (UHAL)

In 2023, Amerco (UHAL) reported a Gross Margin of 0.8562, compared to 0.8476 in 2022. This represents an increase in the Gross Margin, translating to an improvement in the company's operational efficiency and profitability. Given this positive trend, 1 point should be added according to the Piotroski F-Score criteria. Historically, over the past 20 years, Amerco has demonstrated higher Gross Margins compared to the industry median, indicating robust performance and effective cost management. For instance, in 2023, the industry median stands at 0.4056, significantly lower than Amerco's 0.8562.

Asset Turnover Ratio is growing?

The Asset Turnover ratio measures the efficiency of a company's use of its assets in generating sales revenue. An increasing ratio suggests better performance.

Historical asset turnover ratio of Amerco (UHAL)

Comparing the Asset Turnover ratio for Amerco (UHAL), it is evident that the ratio has decreased from 0.3593 in 2022 to 0.3313 in 2023. This decline signifies a 7.79% decrease in efficiency, implying that in 2023, the company generated fewer sales per unit of asset compared to 2022. Historically, the ratio has fluctuated, with a peak of 0.4373 in 2016 and a gradual decrease thereon. Therefore, no point will be added, making this a negative trend for UHAL in this Piotroski criterion.


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