5. Vail Resorts, Inc. (NYSE:MTN)
Number of Hedge Fund Holders: 29
Vail Resorts, Inc. (NYSE:MTN) ranks fifth on our list of the best casino stocks that pay dividends. The Colorado-based resort and casino company has approximately 37 ski resorts across North America. The stock is down by over 52% from its 2021 high as it continues to struggle with the effects of weak consumer spending that began during the 2020 pandemic. In addition, reduced snowfall at several North American resorts and concerns about the company’s debt levels are also contributing to its decline. The stock has declined by over 16% since the start of 2024.
However, Vail Resorts, Inc. (NYSE:MTN) experienced better overall conditions in March and April, with increased visitation at its western North American resorts, thanks to improved weather conditions. As a result, the company achieved record levels of resort net revenue and Resort Reported EBITDA in fiscal Q3 2024. This growth was driven by the stability provided by its advanced commitment strategy, excellent operational execution, and continued strong increases in ancillary spending per skier visit across its ski school, dining, and rental services at the resorts. The company generated $1.28 billion in revenues during the quarter, which saw a 3.6% growth from the same period last year. Its net income came in at $362 million, up from $325 million in the prior year period.
Vail Resorts, Inc. (NYSE:MTN)’s balance sheet remains solid, with a total cash and revolver availability of around $1.3 billion as of April 30, 2024, including $705 million in cash on hand. Its debt position is still concerning for investors as it has nearly $3 billion in total debt as of the most recent quarter with a deb-to-equity ratio of 2.2. However, the company’s increasing cash reserves could potentially offset its debt levels, which is something investors are relying on.
Artisan Partners also highlighted Vail Resorts, Inc. (NYSE:MTN)’s growth prospects in its Q2 2024 investor letter. Here is what the firm has to say:
“We also added to our existing position in Vail Resorts, Inc. (NYSE:MTN), a premium skiing, lodging and resort company, that has fallen by nearly 25% over the past year. Mother nature didn’t cooperate this past winter as there was below-average snowfall early in the ski season and highly variable temperatures. That contributed to reduced visitation, which had second-order effects on retail, rental and lodging activity. On the positive side, growth in advanced pass sales drove low-single-digit growth in lift revenues, while labor costs were well controlled. Vail is one of a couple dominant players in an industry that benefits from high barriers to entry due to the fixed supply of suitable mountains. Of course, this is a highly seasonal business, dependent on appetite for ski vacations and the right weather conditions, but the company has made strides to improve the business model by increasing the percentage of its business from the advance commitment pass product, which transforms the business from one of uncertainty and weather dependency to one of greater visibility and predictability. This provides stability and the ability to spend on capex during the off season to improve the guest experience, as well as pursue additional footprint expansion.”
One of the best casino stocks, Vail Resorts, Inc. (NYSE:MTN) has been making regular dividend payments to shareholders since 2011. Although the company cut its dividend by 50% in 2021 because of the pandemic, it continued to pay dividends without interruption. Currently, it offers a quarterly dividend of $2.22 per share for a dividend yield of 5.02%, as of September 12.
Insider Monkey’s database of Q2 2024 indicated that 29 hedge funds owned stakes in Vail Resorts, Inc. (NYSE:MTN), up from 27 a quarter earlier. These stakes have a consolidated value of over $701.3 million.
