Vail Resorts Keeps Dividend Steady Despite Mixed Results
Vail Resorts has maintained its quarterly dividend at $2.22 per share, yielding about 6%. Despite this attractive yield, income-focused investors may want to hold off on buying shares due to earnings pressure, a high payout ratio, and limited flexibility.
The company's fiscal 2025 results showed mixed performance. Resort EBITDA rose by 2%, and net income increased to roughly $280 million. However, total skier visits declined by 3% across North American resorts, and season-to-date pass product sales units were down about 3%. The nearly 6% yield appears less like a bargain and more like compensation for slower growth and increased uncertainty.
Vail Resorts used its own generated free cash flow and available cash reserves as capital sources for share repurchases in fiscal year 2025. For fiscal 2026, management is guiding for net income between $201 million and $276 million, and resort reported EBITDA to be in the range of $842 million to $898 million, indicating flat or modest growth. The annualized dividend payout of $8.88 per share exceeds fiscal-year earnings per share of $7.53, indicating a high payout ratio.
Rob Katz's recent return as CEO could potentially catalyze the business, but any turnaround efforts will take time to materialize. With net debt at approximately 3.2 times EBITDA, which is manageable but significant, investors should resist the urge to chase Vail's yield at current prices.
