Back in March, I took a moment to reflect on how far we’ve come and what the “new normal” looks like in a post-Covid world.

I’m sure you remember the days of canceled events, lockdowns, and uncertainty. How could we forget?

But more importantly (for our purposes), I also noted some of the interesting changes that had taken place since the early days of the outbreak. As I said then, “it also triggered widespread changes in attitudes that could influence consumer behavior (and spending patterns) for years to come.”

Indeed. Some of those changes, dare I say, were positive – and could be lasting.

I’ve written about this before, but the lure of the outdoors has become a powerful macro trend. And RVs remain an economical travel option, given the soaring cost of airfare, hotels, and rental cars. Campgrounds and reservation books around the country remain full.

For example, Americans seem to have a new appreciation for the great outdoors. The National Park Service welcomed 297 million visits in 2021, up 25.3% from 2020.

Ask any salesman at a recreational vehicle (RV) dealership, and they’ll tell you… they couldn’t keep up with the booming demand.

This isn’t a confined to the Boomer generation, either. As my colleagues Brad Briggs and Jimmy Butts have noted in the past, the Millennials are discovering the joys of RV and camper life, too. And the manufacturers have adapted by offering more economic and nostalgic models that cater to their preferences.

The only potential roadblock to burgeoning sales recently has been gas prices. When gas was averaging nearly $5 per gallon, that could be a potential deal-breaker for potential recreational vehicle (RV) buyers.

After all, these things aren’t exactly known for their fuel efficiency.

A recent poll indicated that nearly three-fourths of RV dealers had seen a slowdown in demand this summer. Almost half expect sales volumes to dip in 2022, with industry-wide shipments expected to fall 12%. That’s an abrupt change from last year when inventories were thin and manufacturers struggled to keep up with demand.

Still, while perhaps a little off that heated pace, the industry remains quite healthy in absolute terms. And I expect this to be the case for the foreseeable future.

One of my favorite picks in this industry, Camping World (NYSE: CWH), is taking full advantage.

Record Numbers, And More Growth Ahead

The company sold nearly 40,000 new and used RVs for the period, chalking up $1.6 billion in product sales – not counting contributions from the service and insurance departments. Total revenues for the period rose 5% to $2.2 billion, a new record.

CWH posted an impressive second-quarter report card that blew away expectations. Earnings came in at $2.16 per share, easily topping the consensus target of $1.87.

On the downside, rising costs for new vehicles has taken a bite out of margins. While new RV sales were roughly level at $1.077 billion, costs climbed to $852 million (a 12% uptick), leaving a thinner gross profit of $225 million. Fortunately, the pre-owned side of the business helped pick up some of the slack.

The quickest growth lately has been in the used vehicle department. This has helped CWH offset some inflation and supply chain challenges. It’s also important to note that Camping World also hauls in steady post-sale income from service/maintenance and financing/insurance.

This recurring cash flow stream continues to flow long after customers have driven their new toys off the lot. Meanwhile, Camping World is also now leveraging its expertise in this field by branching out into the burgeoning peer-to-peer RV rental market. The new platform will enable first-time users to experience the RV lifestyle for a weekend, perhaps turning renters into eager new buyers.

The company is also expanding its retail footprint with plans to open a dozen new dealerships from Missouri to Montana to accommodate a growing interest in the great outdoors and newfound popularity of the RV lifestyle.

But that’s not the biggest piece of news. On May 23, the company inked the largest acquisition in its history, taking control of privately-owned Richardson’s RV centers. This deal cements Camping World’s leadership position in the California market, expanding its footprint with multiple locations in the San Diego area. Financial details of the transaction were sparse, but the Richardson’s brand has been around for more than a quarter-century and cultivated a sizeable customer base.

A Monster Dividend Yield

Since making its market debut in 2016, Camping World has doubled its revenues and tripled its net income.

While management is funneling capital into expansion opportunities, the company is quite generous with regard to dividends.

Quarterly distributions ratcheted from $0.15 to $0.25 last May, doubled to $0.50 a few months later, and have since risen to $0.625. The annual payout of $2.50 per share means CWH throws off a healthy yield above 8%. Management also continues to opportunistically repurchase shares.

The combination of strong organic growth and aggressive expansion bodes well for the rest of the year and is well-timed to capitalize on gusty industry tailwinds. It’s only a matter of time before Camping World’s retail (and service/maintenance) presence is entrenched across 48 states from coast to coast.

The consumer discretionary space can be tricky – especially in this environment. But so far, things are looking promising for CWH. If you’re looking for a high-yield stock with considerable upside, put this one on your list.

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