Vail Resorts Now Has a 6% Dividend Yield. Time to Buy the Stock?

Core Viewpoint - Vail Resorts presents an attractive dividend yield of around 6%, but the investment case hinges on cash-flow growth potential and business momentum rather than yield alone [3][9]. Group 1: Company Overview - Vail Resorts operates a global network of ski areas, supported by the Epic Pass, with a competitive advantage due to regulatory challenges in establishing new resorts [2]. - The stock has faced struggles despite its iconic assets, making it a candidate for investors' watchlists [2]. Group 2: Recent Performance and Financials - In Q3 of fiscal 2025, Vail reported flat resort net revenue year-over-year and a slight 1% decrease in EBITDA, attributed to pre-sold pass revenue despite a decline in skier visits [5]. - The company updated its fiscal-year resort reported EBITDA guidance to a range of $831 million to $851 million, reflecting cost discipline and a resource efficiency plan [6]. - Cash from operations for the trailing nine months was approximately $726 million, allowing for capital expenditures, share repurchases, and dividends [7]. Group 3: Dividend and Shareholder Returns - Vail's annual dividend payments amount to roughly $330 million, with future increases contingent on significant cash flow growth [9]. - The stock trades at 6.3 times the midpoint of management's EBITDA forecast, indicating a reasonable valuation for a capital-intensive operator [10]. - The company also engages in stock buybacks, with an expanded buyback authorization to retire shares when deemed valuable [11]. Group 4: Investment Considerations - The current dividend, supported by strong cash generation, is appealing for income-focused investors, but it is not guaranteed to grow automatically [13]. - Investors should monitor pass sales and early season trends for signs of improvement before making investment decisions [13].