WGO - Winnebago Industries: Getting Ready For Higher Returns

2024-03-26 09:05:39 ET

Summary

• Winnebago Industries is a major producer of recreational vehicles (RVs) in North America.
• The company has shown strong growth in sales, EPS, and free cash flow over the past decade.
• Despite current market conditions, the company is well positioned to capitalize on the RV industry's growth potential through its strengthening competitive advantages.
• Based on a Discounted Cash Flow analysis, WGO's shares appear considerably undervalued, providing opportunity for long-term investors.

Winnebago Industries ( WGO ) is one of the major producers of recreational vehicles (RVs) in North America. The company manufactures towable RVs, motorhomes, premium boats and aluminum pontoons through multiple wholly-owned subsidiaries and the flagship Winnebago brand. Born in 1958 under the name Modernistic Industries, the company has since then become a reference for quality and innovation among those who enjoy life outdoors. As a consequence, the company has kept growing sales, EPS and free cash flow ((FCF)) at outstanding CAGR levels (15.83%, 18.62% and 43.27% respectively) in the last ten years. And in the last five, WGO’s total shareholder returns -assuming dividends were reinvested- have outsized those of the S&P 500 ( SPY ), the Russell 3000 ( IWV ) Recreational Vehicles and Boats Subsector, and of a peer group consisting of THOR Industries, Inc. ( THO ), Polaris Inc. ( PII ), and Brunswick Corporation ( BC ):

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