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Vail Resorts' Lofty Valuation And Unsafe Dividend Are Keeping Me Off The Slopes

Published Wed, 09 Oct 2019 11:01:59 -0400 on Seeking Alpha

When I'm thinking about making an investment in the markets, there are 5 basic qualifications that I want to see a potential company meet. First, I'm looking for high quality names. Second, I want to see an attractive valuation. Third, look at historical data to make sure that earnings are fairly predictable. Fourth, as a dividend growth investor, I obviously want to see attractive dividend related metrics. And lastly, I need to be able to see long-term tailwinds that have the potential to continue to push the stock on an upwards trajectory. Now, it's not quite as simple as this introduction may make it seem. Rarely, is anything ever simple in the markets (there are simply too many variables at play for this to be the case). But, that is my basic checklist and when a subscriber asked me to give my opinion on Vail Resorts (MTN), I decided to use this checklist as a template for this article's structure.
Vail isn't currently a part of my portfolio, but it is a name that I've owned before. It's also a name that I continue to track because I really like certain aspects of the company's business.
I originally bought my shares of MTN for $221.89 in December of 2017 and decided to sell those shares for a roughly 10% profit (including dividends received), exiting at $244.85 in June of 2018. I decided to put the proceeds from that trade into Hershey (HSY) at $90.09, which turned out to be a great idea because I eventually sold those HSY shares for $137.70 in June of 2019, locking in... Read more