The outbreak of the COVID-19 pandemic in the United States last year halted travel, forcing people to cancel vacation plans. However, even when these restrictions began to be lifted, people stuck in their homes for a long time were reluctant to resume travel plans via public transport such as flights. Instead, they preferred to travel in their own recreational vehicles (“RVs”) and camping found a new lease of life as it saw a resurgence of interest among people as a convenient way to spend a family vacation.
People chose recreational vehicles because these vehicles offered them a safer way to travel, with less contact and social distancing. Interestingly, the trend towards work and distance learning also drove the demand for recreational vehicles, as people could work or learn from anywhere. Notably, a Boston Herald article cited that, according to data from LendingTree, interest in recreational vehicles increased 162% during the pandemic.
However, the situation is improving in the United States, thanks to the rapid progress of the vaccination campaign. Even then, the booming demand for recreational vehicles is expected to continue this year and Americans continue to take road trips. Notably, the Boston Herald article said that a Harvest Hosts travel survey found that 99% of respondents said they felt safe when traveling in an RV. Additionally, 53% of total respondents said they plan to travel exclusively by motorhome in 2021. In fact, a survey by Abacus Data found that the pandemic has created around 18 million new motorhome travelers. because in the United States, as mentioned in an article by RVezy.
Reflecting these positive developments and the continued interest in recreational vehicles, the North American recreational vehicle market appears poised for growth in the future. Significantly, a report from Research and Markets stated that the North American RV market is expected to experience a CAGR of around 5% between 2021 and 2026, as mentioned in a Business Wire article. The RV Industry Association said in a report that total RV shipments for 2021 are expected to be 576,065 units, which is a 33.8% increase from 2020.
4 stocks to buy now
The booming demand for motorhomes in the United States is expected to continue this year as people prefer them as a safer form of travel, even as we move beyond the woes of the pandemic. Therefore, this seems like an opportune time to invest in stocks with strong fundamentals which should benefit from this continued rise. Notably, we handpicked four of those stocks that carry a Zacks # 1 (strong buy) or 2 (buy) rating. You can see the full list of today’s Zacks # 1 Rank stocks here.
Skyline Champion Corporation (SKY – Free Report) operates as a prefabricated housing company in North America and offers manufactured and modular homes, model RVs, accessory housing, and more. The company currently has a Zacks Rank # 1. Zacks’ consensus estimate for current year earnings has risen 7.4% in the past 60 days. The company’s expected profit growth rate for the current year is 22.9%.
Thor Industries, Inc. (THO – Free Report) designs, manufactures and sells recreational vehicles, as well as related parts and accessories in the United States, Canada and Europe. The company currently has a Zacks Rank # 2. Zacks’ consensus estimate for current year earnings has risen 8.7% in the past 60 days. The company’s expected profit growth rate for the current year is over 100%.
Winnebago Industries, Inc. (WGO – Free Report) manufactures and sells recreational vehicles and marine products primarily for leisure travel and outdoor recreation activities. The company currently has a Zacks Rank # 2. Zacks’ consensus estimate for current year earnings has risen 0.7% in the past 60 days. The company’s expected profit growth rate for the current year is over 100%.
Patrick Industries, Inc. (PATK – Free Report) manufactures and distributes components, construction products and materials for the RV, marine, manufactured home and industrial markets in the United States and Canada. The company currently has a Zacks Rank # 2. Zacks’ consensus estimate for current year earnings has risen 22.5% in the past 60 days. The company’s expected profit growth rate for the current year is 78.6%.
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