When you think of high-yield dividend stocks, you might think of sectors like tobacco, telecom, REITs, or any others known for rewarding income investors.

One stock you probably haven't considered is an RV retailer, Camping World Holdings (CWH -2.71%), which now pays a dividend yield of 10.3%, making it one of the highest-yielding retail stocks on the market. 

Camping World not only offers a double-digit dividend yield, but the stock also looks dirt cheap at a price-to-earnings ratio of just 5. Is Camping World's 10% yield sustainable? Let's take a closer look.

What is Camping World? 

Camping World is the country's biggest retailer of RVs and related products and has grown historically through a roll-up strategy, acquiring smaller RV dealerships and folding them into its brand. It now has nearly 200 stores in 42 states across the country.  

As you might guess from the nature of its business, Camping World's revenue soared during the pandemic as Americans looked for alternative ways to vacation. As a result, revenue and earnings have declined this year as the company is up against difficult comparisons with results from a year ago as well as higher gas prices and concerns about inflation and a recession. 

CWH Chart

CWH data by YCharts

In its third quarter, revenue declined 3% to $1.86 billion, and adjusted earnings per share tumbled from $1.98 to $1.07. The company did not give guidance, but CEO Marcus Lemonis expressed confidence in the growth of the company's used vehicles business, which he believes can get to $3 billion in revenue annually. Used vehicles also generate higher margins than new vehicles and churn faster, making the segment an appealing growth opportunity. He also said that the used vehicle business and the company's Good Sam membership program would help it outperform the RV market over the next year or two.

The dividend details

At a dividend yield of 10.3% and a trailing price-to-earnings ratio of just 4.6, the stock looks quite attractive. Plus the dividend looks well-funded based on a payout ratio of less than 50%, meaning the company is spending under 50% of its profits on dividends. Those earnings have been inflated by the pandemic, but management is committed to maintaining the dividend as the company plans to tightly control its selling, general, and administrative expenses and capital expenditures.

Lemonis said on the recent earnings call, "Our management team is not naive to the current macroeconomic environment, and we are currently making the hard choices on what to shed and where to deploy our capital," but he stressed that the company's growth drivers and its dividend remain a priority.

The good news for investors is that while analysts see earnings per share declining next year, the consensus calls for adjusted earnings per share of $3.67, which would give the company a dividend payout ratio of 68%. That's still considered safe. However, it's worth remembering that this forecast is just a prediction.

Is the dividend safe?

Wall Street generally seems pessimistic about the RV industry right now. Camping World and RV manufacturers like Thor Industries and Winnebago Industries have all seen their valuations decline over the last two years, indicating that the market expects earnings to sink. 

CWH PE Ratio Chart

CWH PE Ratio data by YCharts

Camping World's ability to continue paying its dividend will depend on the broader economy and demand for RVs. However, the rate of inflation is steadily coming down, and the Federal Reserve is expected to start slowing interest rate hikes, which means a "soft landing" is still possible. 

If the economy can avoid a deep recession, other trends could favor Camping World, as the rise of remote work and the retiring baby boomer population should provide tailwinds to RV sales. Additionally, the company's roll-up strategy seems like a smart way to consolidate the market. 

While there's certainly a risk to owning the stock for the dividend, as this is a highly cyclical business, at the current price and with a 10% yield, it seems like a risk worth taking for high-yield investors.