Unraveling the Dividend Dynamics of Vail Resorts Inc
Assessing Dividend Performance and Sustainability for Value Investors
Vail Resorts Inc (NYSE:MTN) recently announced a dividend of $2.06 per share, payable on 2023-10-26, with the ex-dividend date set for 2023-10-06. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Vail Resorts Incs dividend performance and assess its sustainability.
Understanding Vail Resorts Inc's Business Model
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Vail Resorts Inc is a resorts and casinos company that operates mountain resorts and ski areas. The company has three business segments that include Mountain, Lodging, and Real Estate. The Mountain segment operates numerous ski resort properties that offer a variety of winter and summer activities, such as skiing, snowboarding, snowshoeing, hiking, and mountain biking. The Lodging segment owns and operates hotels and condominiums. The Real Estate segment owns, develops, and leases real estate, typically near its other properties. The company generates the vast majority of its revenue within the United States.
Tracing Vail Resorts Inc's Dividend History
Vail Resorts Inc has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Exploring Vail Resorts Inc's Dividend Yield and Growth
As of today, Vail Resorts Inc currently has a 12-month trailing dividend yield of 3.76% and a 12-month forward dividend yield of 3.91%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Vail Resorts Inc's annual dividend growth rate was 14.60%. Based on Vail Resorts Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Vail Resorts Inc stock as of today is approximately 3.76%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-07-31, Vail Resorts Inc's dividend payout ratio is 1.18, which may suggest that the company's dividend may not be sustainable.
Vail Resorts Inc's profitability rank of 8 out of 10 as of 2023-07-31, suggests good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Future Prospects: Evaluating Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Vail Resorts Inc's growth rank of 8 out of 10 suggests a good growth trajectory relative to its competitors. Vail Resorts Inc's revenue has increased by approximately 14.80% per year on average, a rate that outperforms approximately 84.3% of global competitors. The company's 3-year EPS growth rate of 40.70% per year on average also outperforms approximately 78.3% of global competitors. However, the company's 5-year EBITDA growth rate of -2.20% outperforms approximately 35% of global competitors.
Conclusion
While Vail Resorts Inc exhibits a consistent dividend payment record and impressive growth metrics, the high payout ratio raises concerns about the sustainability of its dividends. However, the company's robust profitability and positive net income over the past decade provide some reassurance. Ultimately, investors must consider these factors carefully when assessing the dividend prospects of Vail Resorts Inc.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
