When the dog days of summer set in, there’s nothing like a refreshing day out on the water. I’m fortunate to live within splashing distance of five “diamond lakes” nationally renowned for their scenic shorelines and crystalline depths.

So with the mercury soaring into triple-digit territory last weekend, it was an opportune time to join a few friends out on Lake Hamilton. 7,200 acres of cool, inviting water ready for swimming, tubing and other recreational pursuits. We didn’t pull back into the dock until after dark — hence my new sunburn.

My only complaint: everyone within a hundred-mile radius apparently had the same idea. There were countless vessels of all shapes, sizes and horsepowers skipping across the waves… from jet skis and tritoons to wakeboard rigs and giant cabin cruisers.

Boat traffic seems to get heavier with each passing summer. It’s not just my imagination. According to the National Marine Manufacturers Association (NMMA), nearly a quarter-million new powerboats were sold in the U.S. last year.

Buyers have barely throttled back from the post-pandemic era, when annual sales volume was running at a 300,000-unit pace. That was an unusual time with extraordinary pent-up demand. The market has normalized somewhat since then. Still, the larger surge in outdoor activities is showing no signs of slowing.

Just ask Sun Communities (NYSE: SUI). Back in 2020, the property owner paid $2.1 billion for Safe Harbor, gaining control of roughly 100 marinas in two dozen states. A few months ago, it sold those same waterfront complexes to a private equity group for $5.6 billion – pocketing a healthy gain.

Incidentally, my High-Yield Investing readers collected a sizeable $4.00 per share special dividend from that transaction.

There just aren’t enough parking spots on U.S. waterways – 1 million wet slips for approximately 12 million registered boats.

I don’t see that ratio narrowing anytime soon. There are 50 million avid fishermen in the U.S. and more than twice as many recreational boating enthusiasts. While high financing rates remain a headwind, tariffs aren’t a huge concern because 95% of boats sold in the states are made right here at home (although some components are sourced overseas).

Many models remain affordable, which explains why 60% of boat owners are middle-class consumers with under $100,000 in annual income. The rise of boat sharing apps has helped broaden the market. So has the popularity of boat clubs, where dues-paying members have access to a fleet of vessels without the headaches (maintenance and insurance) of outright ownership.

Just like our four-wheeled toys, technology has revolutionized the boating industry: think autonomous docking systems. All of the latest bells and whistles are on display at the annual Miami International Boat Show, which attracts over 100,000 visitors each year.

I had the privilege of attending a few years ago to “test drive” a new electric outboard engine made by Vision Marine (NSDQ: VMAR). If you’re into boating, put this massive convention on your bucket list. Preliminary feedback from buyers and dealers at this year’s gala was encouraging. In fact, domestic boat sales are expected to rise 5% in 2025, topping $55 billion.

There are hundreds of businesses feeding at this trough. Few are any larger than Marine Products (NYSE: MPX), which makes high-end pleasure and sportfishing boats under the Chaparral and Robalo brand names. Both are well-respected across the industry and combined occupy the number one market share position for their respective categories.

The broad portfolio encompasses dozens of different models, from center console bay boats popular with coastal anglers to luxurious yachts that feature snazzy entertainment consoles and plush overnight accommodations. The company caters to a wide range of potential buyers and budgets, at price points that begin at $36,000 and escalate to $688,000.

The firm’s manufacturing hub is located in Georgia, where new boats are fabricated, assembled, and tested before shipping out across the country and around the globe. A decade ago, the company worked with approximately 200 dealers. Today, that network has expanded to more than 300 retail partners, including outlets in Europe, Asia, and Australia.

Of course, it’s easier to win over dealer support when the builder has taken home 70 J.D. Power awards for reliability and customer service.

As you can probably tell from the stock chart, Marine Products hasn’t escaped the broad slowdown in discretionary consumer spending. Sales fell by 38% last year to $236 million, while earnings were cut in half. But after 60 years in operation, the company knows how to batten down the hatches during a storm.

The vertically integrated business makes many of its own components (from cabinets to chair upholstery), which helps control the cost structure and protect margins. Capital spending needs are relatively modest. And over the past decade, it has averaged a lofty return on invested capital (RoIC) of 27%.

That means strong cash generation even in cyclical downturns. Despite stiff macro challenges, the company maintained its regular quarterly dividend last year and even dished out a $24 million ($0.70 per share) special dividend along the way.

And the worst may be over. First quarter 2025 sales showed a 23% sequential increase from the prior period. The top-line showed further stabilization this past quarter as dealers began to restock.

This looks to be a potential inflection point. But if the seas remain choppy, Marine Products is buoyed by a debt-free balance sheet and a $50 million cash position. Trading at less than two times last year’s operating cash flows, it may be time to climb aboard this undervalued boat maker.