Value Line has initiated coverage of Mobile Mini, Inc. (MINI) in its flagship product, The Value Line Investment Survey. The company is a leading provider of portable storage solutions, with a total portable storage and office fleet of approximately 212,900 units as of December 31, 2013. At the end of last year, it operated in 136 locations throughout North America and in the U.K., maintaining a strong leadership position in virtually all markets served.
Mobile Mini offers a wide range of portable storage products in varying lengths and widths, complete with an assortment of differentiated features such as patented locking systems, premium doors, electrical wiring, and shelving. MINI’s portable units provide secure, accessible temporary storage for a diversified client base of over 84,000 customers across various industries, including construction, consumer services & retail, industrial, commercial, and governmental. The company’s customers utilize its solutions for a wide variety of storage applications, including retail & manufacturing supplies, inventory & maintenance supplies, temporary offices, construction materials & equipment, documents & records, and household goods.
The business was founded in 1983 and focuses on leasing rather than selling its portable storage units. Mobile Mini derives most of its revenues from the leasing of portable storage containers, security office units, and mobile office units. Leasing sales represented approximately 90% of its total revenues for the year ended December 31, 2013. The company also sells new and used portable storage containers, security office units, and mobile office units, while providing delivery, installation, and other ancillary products & services. This segment comprises the remainder of Mobile Mini’s revenue base.
Mobile’s fleet primarily consists of remanufactured and differentiated steel portable storage containers that were built according to standards developed by the International Organization for Standardization (“ISO”), other steel containers, steel security offices that it manufactures, and mobile offices. The company remanufactures and customizes its units by adding proprietary locking and easy-opening premium door systems to its purchased ISO containers and steel security offices. Because they are composed chiefly of steel, these assets are characterized by low risk of obsolescence, extreme durability, relatively low maintenance, long useful lives and a history of high-value retention. In addition, MINI also maintains wood mobile office units in its lease fleet to complement a suite of core steel portable storage containers and steel security offices.
The company faces competition from several local and regional businesses, as well as national chains, in all of its markets. It squares off against several large national and international entities in the mobile office product line. MINI’s competitors include lessors of storage units, mobile offices, used van trailers, and other structures used for portable storage. The company also goes head-to-head with conventional fixed self-storage facilities. Here, Mobile competes largely in terms of security, convenience, product quality, broad selection, availability, lease rates, and customer service. Primary peers include the following: Algeco Scotsman, PODS, Pac-Van, 1-800-PACK-RAT, Haulaway Storage Containers, ModSpace, McGrath RentCorp (MGRC), Wernick Hire, and other national, regional and local companies.
The stock has performed well over the last 12 months, trading near all-time highs, largely due to healthy year-to-year sales and share earnings advances. At present, the company has decided to shy away from manufacturing new units, instead opting to repair its current fleet. This decision ought to create a more rent-ready product and enhance profitability ahead. In addition, Mobile Mini has also announced plans to initiate a quarterly cash dividend, it will issue its first quarterly payout of $0.17 on March 20, 2014. Too, it also intends to move forward with a $125 million stock repurchase program. Both moves should help to increase shareholder value.
All told, subscribers interested in this portable storage solutions provider are advised to consult Value Line’s quarterly reports for Mobile Mini, Inc., as well as any supplemental reports and relevant articles as important news items arise.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.