The recreational boating industry is expected to grow significantly in 2022, as people engage in outdoor leisurely activities after nearly two years of lockdowns and social distancing norms. According to the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA), recreational boating and fishing were the highest contributors to the outdoor recreation economy, valued at $689 billion. In 2021, new powerboat sales exceeded 300,000 units. And new boat sales in 2022 are projected to rise 3% year-over-year.
Despite supply chain constraints, the boating industry is projected to gain momentum in 2022, given the pent-up demand for outdoor recreation. Thus, boating companies are expected to witness high demand this spring.
Given these factors, we think it advisable to invest in high-quality boating stocks OneWater Marine Inc. (ONEW) and MasterCraft Boat Holdings, Inc. (MCFT). These names are projected to gain momentum in the near term.
OneWater Marine Inc. (ONEW)
ONEW is a recreational boat retailer that operates in the U.S. The Buford, Ga.-based company provides new and used boats, yachts, and other related marine products. In addition, it offers boat repair and maintenance services, financing, insurance, and other ancillary services. ONEW operates 70 stores in 11 states in the U.S, including Texas, Florida, Alabama, North Carolina, South Carolina, Ohio, Georgia, and New Jersey.
On March 2, 2022, ONEW reached an agreement to acquire Denison Yachting. The acquisition might expand the company’s superyacht sales, yacht sales, and ancillary yacht service offerings in addition to yacht brokerage.
On March 1, 2022, ONEW’s subsidiary, T-H Marine, acquired YakGear, Inc., a leading supplier of kayak equipment and boat mounting accessories based in Houston, Tex. Through the acquisition, ONEW is expected to expand its market position in the paddle sports vertical and boost its business growth.
In its fiscal year 2022 first quarter, ended Dec. 31, 2021, ONEW's total revenues increased 57.1% year-over-year to $336.27 million. Its total gross profit rose 92.5% year-over-year to $100.97 million. Its income from operations grew 95.4% year-over-year to $31.33 million. And ONEW’s adjusted EBITDA grew 146.1% year-over-year to $40.99 million. Its net income increased 99.5% from the prior-year period to $23.49 million. ONEW's EPS of Class A common stock rose 104.2% in price from its year-ago value to $1.45.
The $412.31 million consensus revenue estimate for its fiscal 2022 second quarter, ending March 31, 2022, represents 25.1% year-over-year growth. The $2.12 consensus EPS estimate for the current quarter indicates a 14.1% year-over-year rise. ONEW has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of all the trailing four quarters.
Shares of ONEW have gained marginally over the past year and closed yesterday's trading session at $36.25.
ONEW's POWR Ratings reflect this promising outlook. The stock has an overall B rating, which translates to Buy in our proprietary system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
ONEW has a B grade for Sentiment, Growth, and Value. Within the Athletics & Recreation industry, it is ranked #6 of 36 stocks.
To see additional POWR Ratings (Momentum, Stability, and Quality) for ONEW, click here.
MasterCraft Boat Holdings, Inc. (MCFT)
MCFT in Vonore, Tenn., designs, manufactures, and markets recreational powerboats. The company operates through three segments: MasterCraft; NauticStar; and Crest. MCFT offers performance sports boats, luxury day boats, and pontoon boats. The company also provides ski, outboard, and sterndrive boats and various related accessories.
Last month, MCFT’s subsidiary MasterCraft Boat Company and exclusive partner Ilmor Marine launched the world’s most powerful tow sports engine, the Ilmor Supercharged 6.2L Engine. With this release, MCFT’s latest lineup of boats might have this exciting new engine to boost the company's sales.
MCFT's net sales increased 34.4% year-over-year to $159.47 million in its fiscal year 2022 second quarter, ended Jan.2, 2022. Its gross profit improved 20.2% year-over-year to $35.20 million. MCFT’s operating income increased 21.3% year-over-year to $20.55 million. The company’s adjusted EBITDA grew 17.4% year-over-year to $25 million. Its net income grew 23.2% year-over-year to $15.40 million. And the company's earnings per share rose 22.7% from the year-ago value to $0.81.
Analysts expect MCFT's revenue for its fiscal year 2022 third-quarter, ending March 31, 2022, to come in at $166.59 million, representing a 12.7% rise year-over-year. The Street expects the company's EPS for the current quarter to be $1.06, representing a 4.8% increase year-over-year. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of all the trailing four quarters.
MCFT has declined 11.2% in price over the past year. The stock closed yesterday's trading session at $24.49.
MCFT's POWR Ratings reflect this strong outlook. It has an overall B rating, which translates to Buy in our POWR Ratings system.
MCFT has a B grade for Sentiment and Value. It is ranked #5 of 36 stocks in the Athletics & Recreation industry.
Click here to see MCFT ratings for Quality, Stability, Momentum, and Growth.
ONEW shares were trading at $37.77 per share on Thursday afternoon, up $1.52 (+4.19%). Year-to-date, ONEW has declined -38.05%, versus a -5.33% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
2 Boating Stocks to Buy as the Weather Warms Up StockNews.com
