Confidence is a huge economic driver in the RV business.
If consumers are uncertain about their own situations, they
don't go out and buy an RV.
With the U.S. economy limping,Thor Industries (
) has naturally struggled with earnings stability. The five-year
stability factor is a mediocre 47 on a scale of 0 (calm) to 99
Yet Thor has reassured investors with a solid dividend record.
During the recession, the dividend was never reduced. Afterward,
increases grew aggressively. The quarterly payout has been raised
from 7 cents a share in mid-2010 to 18 cents a share for a 2%
This is impressive when you consider that the U.S. has not
enjoyed a textbook economic recovery. It's been more of a
footnote recovery -- hard to find and hard to see.
Thor's business involves several segments. Towable RVs
accounted for 74% of revenue in fiscal 2012 ended in July. Buses
and ambulances deliver 14% of revenue, and motorized RVs 12%.
As of June, Thor's U.S. market share in the towable sector was
38% and in motorized RVs, 21%. For small and midsize buses,
market share is about 35%. The buses are mostly sold to
Thor is not a lone wolf. The RV stocks have some
winners.Patrick Industries (
), though thinly traded, has a Composite Rating of 98.Drew
), which supplies Thor with windows, doors and other items, has a
Composite Rating of 97. Thor's Composite Rating also is 97.
The Composite Rating combines all five IBD ratings into a
Thor's industry group was No. 39 among 197 groups as of
Friday's IBD. Six weeks ago, the group was No. 92. The group,
though, includes manufactured home companies -- something that
Thor does not get into.
The RV business traditionally has had low barriers to entry,
but increased regulations have made that less true. Also,
developing a dealer network can pose barriers to entry.
Demographics look favorable. By 2020, the number of Americans
age 55 to 64 will be 73% higher than in 2000, according to
consulting firm AgeWave.