Top Recreational Investment Opportunities to Monitor in 2024
People enjoy spending their free time on leisure activities, and investing in leisure stocks can yield lucrative returns as the global population becomes wealthier. Leisure and recreation encompass a vast array of companies catering to various forms of entertainment, such as theme parks, ski resorts, or streamed content.
Let's examine five promising leisure stocks poised for growth in 2024:
- Walt Disney (DIS) - Offering a blend of entertainment options, Disney is renowned for its theme parks, vacation destinations, televised content, movies, streaming services, and merchandising. With a diverse portfolio in place, the company effectively navigated through challenging times, such as the COVID-19 pandemic. The company's streaming services, like Disney+, have enjoyed remarkable success, currently boasting over 150 million paid subscribers worldwide.
- Marriott International (MAR) - Ranking among the world's largest hotel companies, Marriott International boasts over 8,000 properties across 140 countries. Popular brands include The Ritz-Carlton, JW Marriott, Sheraton, Residence Inn, Courtyard, and MGM Collection, among others. Marriott is an asset-light business that thrives on licensing and property management fees while catering to its massive loyalty program, boasting over 200 million members. Marriott's revenue and occupancy rates have rebounded in 2023 and 2024 as travel demand soars.
- Funko (FNKO) - Known for its distinctive Funko Pop! collectibles, the company has expanded into action figures, plushies, games, and apparel, now boasting a robust product lineup that caters to pop culture's most beloved characters and icons. As a result, Net sales have fluctuated in recent years, but the firm has remained a recognizable brand and has diversified through acquisitions, including Loungefly and Mondo.
- Hilton Worldwide (HLT) - Hilton Worldwide is another prominent player in the hospitality sector, owning 24 popular brands that cater to various budgets and styles. Highlights include Waldorf Astoria Hotels & Resorts and Hampton by Hilton Hotels. The company had a strong 2023, with 462,400 rooms in development and a partnership with Small Luxury Hotels of the World (SLH). Hilton's loyalty program, Hilton Honors, has over 200 million members and continues to attract guests through its excellent offerings.
- Vail Resorts (MTN) - Vail Resorts is a leader in North American skiing with 40 resorts in three countries. Top destinations include Whistler Blackcomb, Vail Ski Resort, Park City Mountain Resort, and Breckenridge Ski Resort. A diverse portfolio such as this enables Vail to excel in the skiing market, with special discounts and deals for loyal customers. While the company suffered during the pandemic, its range of ski resorts could position it for a comeback in the future.
Investors interested in diversifying their holdings can consider investing in leisure-focused ETFs, such as Invesco Dynamic Leisure and Entertainment (PEJ). This ETF boasts a diversified portfolio of leisure stocks, including entertainment companies, casinos, restaurants, and hotels.
#### Investing in Leisure Stocks: A Deeper Dive into the ETF Market
Leisure and entertainment sectors are vast, compelling, and diverse. To avoid the painstaking task of selecting individual leisure stocks, consider ETFs as an alternative investment method.
Here are some benefits of investing in ETFs focused on the leisure sector:
- Diversification: ETFs allow investors to invest in a wide range of leisure stocks, all under one umbrella. This approach spreads risk and provides greater portfolio stability.
- Cost-Effective: ETFs are often more affordable than actively managed funds, given their low expense ratios and management fees.
- Liquidity: ETFs can be bought and sold at market price throughout the trading day, providing added flexibility.
- Transparency: ETFs must disclose their holdings regularly, allowing investors to see what exactly is in their investment.
- Automated Rebalancing: ETFs employ automated rebalancing, eliminating the need for investors to manually adjust their portfolios.
Understanding Leisure-Focused ETFs
Leisure-themed ETFs cater to investors seeking exposure to various leisure industry segments, such as entertainment, casinos, restaurants, and hotels. These ETFs are designed to track indexes or sectors, pooling assets in a single investment vehicle.
Here are some popular leisure-focused ETFs to consider:
- Invesco Dynamic Leisure and Entertainment (PEJ) - This ETF focuses on entertainment companies, casinos, restaurants, hotels, and other leisure-oriented businesses.
- SPDR S&P 500 Leisure and Recreation ETF (PLAY) - This ETF is designed to track the performance of U.S. equities in the leisure and recreation sectors, combining gaming, lodging, and consumer discretionary stocks.
- First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) - Although not a leisure-focused ETF, this fund provides exposure to the green energy sector by investing in U.S.-based renewable energy companies and power generation technologies.
- iShares U.S. Consumer Goods ETF (IYK) - Aside from traditional consumer goods, this ETF also includes restaurant and gaming stocks, providing diversity in the leisure sector.
By researching leisure-focused ETFs and incorporating them into your investment strategy, you can gain exposure to this growing market segment, potentially reaping substantial returns as leisure spending continues to rise.
We all go shopping, and these businesses supply the products we purchase across various industries.######### Exploring Electric Vehicle Stocks Investment
These purely focused electric vehicle companies are worthy of interest as the sector evolves.######### The Leading Six Media Firms
These six entities now control the media sector and might warrant a spot in your investment portfolio.######### Investing in Media Stocks
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Should you buy entertainment industry stocks?
Entertainment and leisure stocks faced obstacles due to the COVID-19 pandemic, but several managed to overcome and are now flourishing. If you're after economical investments, these are blissful circumstances to buy into top performers from the entertainment sector.
In the long term, U.S. recreation spending is forecasted to expand 9.9% yearly up until 2026. This is a positive sign for the best entertainment companies and their investors.
FAQ
Entertainment Stocks FAQ
What is an entertainment stock?
An entertainment stock is a company that offers experiences for individuals to enjoy during their free time. A few examples include theme parks, vacation spots, and toy manufacturers.
What are the leading entertainment companies?
Leading entertainment companies include Disney, Marriott, Funko, Hilton, and Vail Resorts.
Should I buy entertainment stocks?
Entertainment stocks can be profitable, especially when the economy is robust. They are typically cyclical businesses, with results changing from season to season. If you're comfortable with occasional setbacks, entertainment companies could be a suitable addition to your portfolio.
Lyle Daly has no stakes in any of the stocks mentioned. Our Website owns stakes in and recommends Vail Resorts and Disney. Our Website advises Marriott. Our Website has a disclosure policy.
- Investors looking for ways to diversify their portfolio beyond individual entertainment stocks may want to consider investing in leisure-focused ETFs, such as the Invesco Dynamic Leisure and Entertainment ETF (PEJ), which offers a diversified portfolio of leisure stocks including entertainment companies, casinos, restaurants, and hotels.
- As the global population becomes wealthier, there is a growing opportunity for investors to capitalize on the leisure and entertainment sector by investing in companies that offer unique experiences and products, such as theme parks, vacation destinations, television and streaming services, and collectible merchandise.
