Vail Resorts Stock Delivers Strong Cash Yield – Upside Ahead?

Vail Resorts (MTN) could be a good pick for your portfolio, with its high cash yield, good fundamentals, and discounted valuation. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market

What Is Happening With MTN

MTN may be down -21% so far this year but is now trading at P/S (Price-to-Sales) ratio that is at a meaningful discount to its 3-month and 2-year highs, and also belowits 3-year average.

The stock may not reflect it yet, but here is what’s going well for the company. Vail Resorts delivered 2.3% Resort Reported EBITDA growth for fiscal 2025 despite a 3% decline in North American skier visits. For the 2025/2026 season, 2.3 million passholders are committed, generating roughly $1 billion in advance revenue. While pass unit sales were down 2% through December 5, pricing adjustments resulted in a 3% revenue increase. New Epic Friend Tickets and My Epic App enhancements aim to boost visitation, alongside $254 million in 2025 resort improvements. The company has reaffirmed its FY26 guidance.

MTN Has Good Fundamentals

• Good Cash Yield: Not many stocks offer free cash flow yield of 6.9%, but Vail Resorts stock does
• Strong Margin: Last 12 month operating margin of 18.1%
• Growth: Last 12 revenue growth of 3.1% – low growth, but this selection is all about high yield and margin
• Valuation: MTN stock currently trading at 34% below 2Y high, 12% below 1M high, and at a PS lower than 3Y average.

Below is a quick comparison of MTN fundamentals with S&P medians.

*LTM: Last Twelve Months

But What Is The Risk Involved?

While MTN stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. MTN fell about 47% in the Dot-Com crash and plunged over 77% during the Global Financial Crisis. The 2018 correction dragged it down nearly 40%, while the Covid selloff triggered a 48% drop. Even the inflation shock knocked it back more than 44%. Strong fundamentals matter, but when the market turns sour, MTN still shows significant vulnerability. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read MTN Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

For more details and our view, see Buy or Sell MTN Stock.

Stocks Like MTN

Not ready to act on MTN? Consider these alternatives:

1. GLOBALFOUNDRIES (GFS)
2. Ryan Specialty (RYAN)
3. F&G Annuities & Life (FG)

We chose these stocks using the following criteria:

1. Greater than $2 Bil in market cap
2. Dipped last month & meaningfully below 2Y high
3. Current P/S < last few year average
4. Strong operating margin with no instances of large margin collapse
5. High free cash flow yield

A portfolio of stocks with the criteria above would have performed has follows since 12/31/2016:

• Average 6-month and 12-month forward returns of 10.4% and 20.4% respectively
• Win rate (percentage of picks returning positive) of about 74% for 12-month period
• Strategy consistent across market cycles

Portfolios Beat Stock Picking

Individual stocks are unpredictable. A smart portfolio keeps you invested, limits downside shocks, and provides upside exposure

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.