U-Haul's Capital Efficiency Raises Eyebrows as Returns Lag Industry Peers

For long-term investors on the hunt for stocks with explosive growth potential, a company's ability to generate high and improving returns on its invested capital is a critical litmus test. U-Haul Holding Company (NYSE:UHAL), the ubiquitous name in DIY moving and storage, is currently presenting a mixed financial picture that may give pause to growth-focused portfolios.

An analysis of U-Haul's Return on Capital Employed (ROCE)—a key measure of pre-tax profit relative to the capital used in the business—paints a sobering picture. Based on trailing twelve-month data through September 2025, U-Haul's ROCE stands at 2.9%. This figure not only represents a low absolute return but significantly underperforms the broader Transportation industry average of approximately 10%.

The trendline offers little comfort. Over the past five years, U-Haul's ROCE has declined from 4.9%, suggesting a deterioration in the efficiency with which the company generates profits from its capital base. This is occurring even as the company has increased its capital investments. While this could signal a strategic, long-term build-out—perhaps in fleet expansion or real estate for storage—the immediate payoff in terms of sales growth has not been evident over the last year.

"The numbers tell a clear story of capital deployment without a corresponding lift in profitability," says Michael Riggs, a portfolio manager at Horizon Capital Advisors. "For a capital-intensive business like trucking and storage, a sub-3% ROCE is a red flag. It begs the question: are these investments for future growth, or is operational efficiency slipping?"

Shareholder returns have mirrored this stagnation. The stock has delivered a total return of just 19% over the last five years, a period during which the S&P 500 has substantially outperformed. This tepid performance may reflect the market's acknowledgment of these lackluster operational trends.

However, some analysts urge a longer-term view. Sarah Chen, a senior analyst at Midwest Equity Research, notes, "U-Haul possesses an unparalleled brand and a massive physical network. Their recent capital spend could be laying the groundwork for dominating the last-mile logistics and storage sectors. Current ROCE is a snapshot, not the full movie."

A more critical perspective comes from David Keller, an independent investment blogger known for his blunt commentary. "This is a classic case of a legacy business struggling to find its footing in a modern economy," Keller argues. "A 2.9% return? You can get that from a high-yield savings account with zero risk. Management is reinvesting profits at anemic rates of return, which is a direct destruction of shareholder value. The five-year stock performance says it all—this isn't a growth story, it's a value trap."

For investors, the takeaway is nuanced. While U-Haul continues to reinvest in its business, the declining efficiency of that capital, as measured by ROCE, is a tangible concern. The company's dominant market position provides a floor, but for those seeking transformative 'multi-bagger' returns, the current trajectory suggests opportunities may be richer elsewhere in the market.

This analysis is based on historical financial data and analyst forecasts. It is for informational purposes only and does not constitute financial advice. Investors should consider their own objectives and conduct independent research.