We recently published a list of the 10 Best Boating Stocks to Buy Now. In this article, we are going to take a look at where Polaris Inc. (NYSE:PII) stands against other best boating stocks.

The term “boating stocks” refers to the shares of publicly traded companies in the recreational boating industry. These companies may manufacture boats, engines, marine parts, and accessories, or provide associated services such as marinas,  boat dealerships, or charter businesses.

As per the National Marine Manufacturers Association (NMMA), the recreational boating industry in the United States supports 36,101 enterprises, 93% of which are small businesses, and 812,558 jobs, generating $230 billion in economic output yearly. New boat, engine, and accessory sales account for $20.3 billion of the $56.7 billion in annual sales of boats, engines, and maritime services. The industry brings in $26.9 billion in taxes, of which $16.3 billion is generated by the federal government and $10.6 billion from the states. Of the 12 million registered boats, 95% of those built in the United States are under 26 feet and towable. The fact that 61% of boat owners have family earnings of $75,000 or less is noteworthy and highlights how accessible the market is to middle-class Americans.

The recreational boating industry began in 2025 with mixed data, reflecting overall economic uncertainty. According to the NMMA’s January 2025 Monthly Data Summary, total new powerboat retail unit sales fell 8.2% year on year for the 12 months ending January 2025, showing continued consumer caution in the face of rising inflation and interest rates.

However, January 2025 sales showed a slight growth, with retail unit sales up 1% year on year (7,809 vs. 7,765). This is the first January gain since 2021, pointing to selective customer participation. Freshwater fishing boats led the recovery, with retail sales rising 3.8% year on year, including a significant 19.8% increase in January alone. NMMA cites the category’s affordability and its appeal to middle-income consumers.

Despite this, wholesale shipments fell 23.2%, showing tighter inventory management and caution among dealers. January’s Consumer Confidence Index fell marginally to 105.3, whereas inflation rose to 3.0%. The average 30-year fixed mortgage rate climbed to 6.9%, and while the federal funds rate fell to 4.3%, higher borrowing costs continued to limit discretionary expenditure.

A cautiously optimistic picture is painted by the aforementioned data, which shows that while consumer interest in value categories continues, macroeconomic challenges continue to limit overall momentum.

Ellen Bradley, Chief Brand Officer for the National Marine Manufacturers Association (NMMA), commented:

“The tariff headwinds and economic uncertainty we’re seeing now, coupled with the glimmer of growth we saw in January before this really set in, underscore the importance of the industry leaning into nurturing demand amid Americans’ desire for long-term value, wellness, and community–all of which being on the water uniquely delivers,” added Bradley. “We’re watching consumer behavior and confidence closely in order to nimbly manage our approach with everything from messaging to media to timing across our Discover Boating marketing. Bottom line, there’s an opportunity right now to break through by helping people find ways to explore the memories and moments only boating can provide and to support and nurture that interest for long-term industry growth.”

Veteran journalist and editor Ed Slack, recognized for leading IBI and TIME Inc.’s maritime business-to-business portfolio and for his global perspectives on the dynamics of the boating market, stated late in 2024 that, as anticipated market circumstances improved, the outlook for 2025 was cautiously positive. Affordability, value, and improving the user experience for both entry-level and luxury boating segments will be major themes. Though it needs to be reframed with distinct value propositions, sustainability is still crucial. Consumer fatigue calls for more than simply greener propulsion; it requires measurable results from Life Cycle Assessments. The fragmented electric boat market is forecasted to consolidate as some companies depart due to low volume and expensive models, while others shift to commercial markets.

Europe’s economy is still in a fragile state, but hopes for 2025 are being strengthened by stabilizing global inflation and interest rates. U.S. trade policy is still a wild card since tensions might be exacerbated by tariffs when Donald Trump takes office again on January 20. Similar changes in 2019 resulted in increased costs but also accelerated reshoring and supply chain resilience; yet, worldwide boating revenues increased by 2% in that year (ICOMIA Recreational Boating Statistics 2019). The industry is well-positioned for 2025, but it must remain flexible in the face of geopolitical turmoil.

Our Methodology

We sifted through online rankings to form an initial list of the 15 Boating Stocks. From the resultant dataset, we chose 10 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 1009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have used the stock’s Market Cap as of April 15, 2025, as a tie-breaker in case two or more stocks have the same number of hedge funds invested.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Polaris Inc. (NYSE:PII)

Number of Hedge Fund Holders: 26

Polaris Inc. (NYSE:PII) is ranked second on our list of the Best Boating Stocks. It creates, develops, and produces power sports vehicles for the off-road, on-road, and maritime markets. The company’s sustained weak demand for recreational vehicles caused it to fail earnings estimates and reduce its FY2024 guidance. The firm has also had to provide dealers cheaper floor plan financing, advertising support, and more promotional activity through rebates since dealer inventories are still too high, all of which are putting pressure on margins. The pandemic’s strong sales, which pushed demand ahead, are also to blame for the retail downturn.

The business has historically operated well in the past, and the current management has shown operating discipline by selling off poorly performing companies that were purchased by the previous management, concentrating on the company’s power sports roots, and carrying on the tradition of giving money back to shareholders through buybacks and dividends. Business cycle returns are solid, with returns on tangible capital often in the mid-to-high teens. Despite a decline in cash generation, which is to be expected given the challenging retail environment, Polaris Inc. (NYSE:PII) is still well-funded.

The redesign of the helms in Bennington pontoons and the launch of the new Series M in 2024 show how innovation in the maritime industry continues to appeal to consumers, reaffirming Polaris Inc. (NYSE:PII)’s dedication to product quality across all market categories.

Overall, PII ranks 2nd on our list of the  10 Best Boating Stocks to Buy Now. While we acknowledge the potential of PII as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PII but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.