Did you haul off and buy a recreational vehicle (RV) during the pandemic? If not you, one of your neighbors likely did, or maybe someone else you know made the plunge.
Annual RV shipments dropped 16% from 483,700 in 2018 to 406,000 in 2019, according to the RV Industry Association. Production was up in 2020, with 430,412 shipments for the year but still weren't quite up to pre-pandemic levels. By the end of 2021, shipments logged 600,240, surpassing total annual production at any time.
Let's learn more about why we should buy RV stocks and three great RV stocks you may want to purchase while the getting's good.
Why Buy RV Stocks?
Despite high gasoline and diesel prices, RV purchases have continued unabated across the U.S. Continued consumer demand and consumers' desire to continue to experience an active outdoor lifestyle.
Nearly two-thirds (64%) of campers expect to take a camping trip in 2022. The KOA Monthly Research Report from March reports that one in five campers plan to take a spring break. More than half of campers have already booked trips for this year and the look ahead for 2022 is strong.
KOA will release its annual North American Camping Report this month. According to experts, campers and leisure travelers will continue to turn to the outdoors as COVID-19 wanes.
3 RV Stocks to Invest in Right Now
You'll see lots of reports from 2020 and 2021 urging consumers to buy RV stocks and you might think you've missed the boat. Not so. Check out our top three picks for RV stocks to purchase right now.
Winnebago Industries Inc., headquartered in Forest City, Iowa, manufactures and sells recreation vehicles and marine products for use in leisure travel and outdoor recreation activities. The company operates six segments: Grand Design Towables, Winnebago Towables, Winnebago Motorhomes, Newmar motorhomes, Chris-Craft Marine and Winnebago Specialty Vehicles.
- Towable products: Including non-motorized vehicles, the company produces products to be towed by automobiles, pickup trucks, SUVs or vans for recreational travel, including conventional travel trailers, fifth wheels, folding camper trailers and truck campers under the Winnebago and Grand Design brand names.
- Motorhomes: Self-propelled mobile dwellings used primarily as temporary living quarters during vacation and camping trips.
- Specialty commercial vehicles: Winnebago produces law enforcement command center vehicles, mobile medical clinics and mobile office spaces; commercial vehicles as bare shells to third-party up fitters; and boats in the recreational powerboat industry under the Chris-Craft and Barletta brand names.
- Equipment manufacturing: The company also manufactures parts for commercial vehicles and sells through independent dealers in the United States, Canada and internationally.
Winnebago shored up second quarter revenues of $1.2 billion, an increase of 39%, including robust organic growth of 29%. The company reported a quarterly diluted EPS of $2.69 and adjusted EPS of $3.14, which is up 42% over the prior year. RV retail market share gains also increased, to 14.3% and $72 million in cash was returned to shareholders.
Camping World Holdings Inc., headquartered in Lincolnshire, Illinois, retails recreational vehicles (RVs) and related products and services under its Good Sam Services and Plans and RV and Outdoor Retail segments. The company offers the following:
- Protection plans
- RV industry products and resources
- Extended vehicle service contracts
- Roadside assistance plans
- Property and casualty insurance programs
- Travel assist travel protection plans
- RV and outdoor related consumer shows
- RV-focused consumer magazines
- New and used RVs
- Vehicle financing
- RV repair and maintenance services
- RV parts, equipment, supplies and accessories
- Supplies for camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding and marine and watersports equipment and supplies
The company operates over 180 retail locations in 40 states through its dealerships and online and e-commerce platforms.
In 2021, revenue was $6.9 billion, an increase of $1.5 billion from last year (26.9%). Gross profit was $2.5 billion, an increase of $753.8 million, or 44.3%. Net income was $642.1 million, an increase of $297.9 million, or 86.5%. Net income margin was 9.3% for 2021 versus 6.3% for 2020.
Adjusted EBITA was $942.1 million, an increase of $377.1 million, or 66.8%, and adjusted EBITDA margin was 13.6% for 2021 versus 10.4% for 2020.
During 2021, the company opened 16 locations, which included twelve RV dealerships acquired in 2021, three RV dealerships acquired in 2020 and one greenfield location.
The company also increased its regular quarterly dividend to holders of Class A common stock from $0.23 per share to $0.50 per share — from $0.92 per share to $2 per share on an annualized basis. On February 18, the company’s board of directors authorized a 25% in quarterly dividends.
In Q4, revenue was a recorded $1.4 billion, an increase of $243.8 million, or 21.5%. Gross profit was $484.6 million, an increase of $106.6 million, or 28.2%. Net income was $59.3 million, an increase of $18.9 million, or 46.9%.
LCI Industries, headquartered in Elkhart, Indiana, manufactures and supplies components for the manufacturers of recreational vehicles (RVs) and adjacent industries in the United States and internationally. It has two segments:
- OEM segment: LCI Industries' OEM segment manufactures and distributes a range of engineered components, such as steel chassis and related components, axles and suspension solutions, slide-out mechanisms, bath and kitchen products, vinyl, aluminum and frameless windows; manual, electric and hydraulic stabilizer and leveling systems as well as entry, luggage, patio, and ramp doors. It also features furniture and mattresses, electric and manual entry steps, awnings and awning accessories, towing products, truck accessories, electronic components, appliances, air conditioners, televisions and sound systems. It produces items for RVs, buses, boat trailers, livestock equipment, trucks, boats, trains, manufactured homes and modular housing. In addition, it makes parts for travel trailers, fifth-wheel travel trailers, folding camping trailers and truck campers.
- Aftermarket segment: This segment supplies RV components to retail dealers, wholesale distributors and service centers as well as replacement glass and awnings to fulfill insurance claims. It also provides biminis, covers, buoys and fenders to the marine industry.
In the Q4 2021, the company showed record net sales of $1.2 billion, up 55% year-over-year and record net income of $82.3 million, or $3.22 per diluted share in Q4, up $33.6 million, or 69%, year-over-year. The company had an adjusted EBITDA of $146.3 million, up $58.2 million, or 66%, year-over-year.
In the full year 2021, record net sales topped $4.5 billion, up 60% year-over-year with net income of $287.7 million and adjusted EBITDA of $511.7 million, up $183.5 million, or 56%, year-over-year.
The company returned $87.2 million to shareholders through dividends.
Get Excited About RV Stocks
Everyone else is excited about the 2022 season, so why not take advantage of the buzz, especially if you're an avid RVer yourself? Pop some stocks into your portfolio while you're at it and enjoy the benefits of dividends as well.
Before you consider Winnebago Industries, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Winnebago Industries wasn't on the list.
While Winnebago Industries currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.
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