Monday, August 29, 2011
High Yield Entertainment Stocks
There's no business like show business. There are many aspects to entertainment: amusement parks, motion picture production companies, theater chains, television, sports, and many other areas. Show business has always been considered inflation-proof. When people can't afford to travel to Europe or on expensive cruises, they go to the movies, an amusement park within driving distance, or just a staycation, sitting at home watching TV.
There are numerous opportunities to invest in this sector, and many of them that pay dividends in excess of 2.5%. WallStreetNewsNetwork.com recently updated its free spreadsheet database of all the high yielding entertainment stocks and notes that pay dividends, with yields approaching as much as 7%.
One example is Cedar Fair LP (FUN), with the memorable stock ticker symbol. The stock yields 2.7%, and has been paying quarterly dividends since 1988. The dividend rate was recently increased by 11.8% over last years payout rate. Revenues for the latest quarter were up 3.2%, however the company recently generated negative earnings. Since the company is structured as a limited partnership, a K-1 will be issued instead of a 1099, so more tax paperwork involved.
Regal Entertainment Group (RGC) operates a chain of movie theaters throughout the United States in mid-sized metropolitan markets and the suburbs. The company has a forward price to earnings ratio of 19.3, and pays a decent dividend of 6.7%. Earnings for the latest quarter were up an incredible 625%.
Another motion picture chain that has theaters in North and South America is Cinemark Holdings Inc. (CNK), with a forward PE of 12.6, and an extremely generous yield of 4.2%. Earnings for the latest quarter were up over 1.8%.
You can check out a list of more than a dozen entertainment stocks and notes with yields above 2%, six of which yield more than 6%, all of which can be found at wsnn.com. Some of the stocks on the list are senior notes, which trade like preferred stocks.
Disclosure: Author did not own any of the above at the time the article was written.