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Whistler Blackcomb Holdings' focus on building shareholder returns – instead of fancy new condominiums – should help the company's shares find traction following a flat initial public offering, according to CIBC World Markets Inc.

In initiating coverage of the ski hill resort operator's shares this week, analyst Alex Avery said the last time Whistler was part of a public company under IntraWest management it used all available cash and leverage to build out a massive real estate development around the ski hills. This time around, a 7.7 per cent dividend will force management to proceed in a more disciplined manner.

Whistler Blackcomb's full and attractive dividend provides a high level of income and serves to reduce the agency risk associated with many other similar investments, Mr. Avery said. "These other investments, with little or no dividend, leave management teams free to pursue a wide variety of expansion and development initiatives with retained corporate earnings, including greater risk."

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The resort went public in November, as owner Intrawest ULC began selling assets to cut debt after a highly leveraged takeover by U.S. hedge fund and private equity firm Fortress Investment Group. The price was cut as investor interest lagged, with the final offering price dropped to $12 from $15.

Because the hill is already developed, Mr. Avery said that investors should expect a steady flow of skiers to what is one of North America's premier resorts. He rated the shares "sector outperform," with a one-year target of $13.75. They were trading Tuesday at $12.51. Only one other analyst follows the shares – Irene Nattel of RBC Capital Markets has a $13 target and "sector perform" rating.

The company has some risks that are particular to its industry, Mr. Avery said. A weak U.S. dollar can drive down prices at its large competitors, snowfall can range wildly from season to season and although the actual mountain is leased from the province until 2032, "the potential exists for changes to agreements or possible claims by first nations" when it comes to renewals.

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