Recreational vehicle (RV) makers owe baby boomers a very big “Thank you!”
Sales of RVs grew 87% from 2009 to 2013, reinvigorating an industry poised to cater to the growing legion of boomers who opt to hit U.S. roadways in lieu of more expensive international trips.
It’s our job, here at Dent Research, to inform you of these demographics-driven industry trends. And to point you in the direction of the best investments you can make to take advantage of these trends.
That’s what we did last June, when we introduced you to the company that’s in the driver’s seat (pardon the pun) of the RV up swell: Thor Industries (NYSE: THO).
Thor is the ideal candidate for our Boom & Bust portfolio, which focuses on companies that fit three broad goals:
Winter Season Shakeout Winners — These are the companies with significant market share and strong balance sheets. Both are necessary for companies to survive these tough times of slow-to-negative growth, driving all but the best out of business.
Demographic Trend Followers — Companies that serve the needs and wants of our largest and most powerful generation of peak spenders — the baby boomers — naturally enjoy a demand-driven tailwind.
Income Producers — Companies that reward shareholders with monthly or quarterly dividend payments are in high demand. With Treasury bonds paying practically nothing, income investors must turn to dividend-paying stocks for yield.
Thor Industries fits the bill in each of these categories. The company commands the largest share of the RV market (at 36%) and has a rock-solid balance sheet with absolutely ZERO debt and more than $100 million in cash.
It obviously caters to the baby boomer demographic, enjoying record demand growth in the past three years. And what’s more, Thor’s stock pays a dividend that’s worth about 1.8% per year.
Since May 2013, Thor has proven to be a great investment, beating the S&P 500’s 10% gain by a 20% spread. Take a look…
Thor’s stock reached a peak of $59 a share in late October, before falling back with the broad market. I think the stock will easily reach $59 again this year, making the recent pullback an opportune time to buy in.
Thor’s strong balance sheet provides stability in a low-growth economy. And its position in the fast-growing RV market should boost revenues and profits for years to come. This is one stock that should be in every investor’s economic winter season portfolio.
If you haven’t already done so, pick up some shares of Thor today.