When movie theater visitors buy tickets, theater stockholders can receive rewards. Movie theater chains More results Regal Entertainment Group (NYSE:RGC), Cinemark Holdings, Inc. (NYSE:CNK), and The Marcus Corporation (NYSE:MCS) all pay out dividends. Recent results suggest that business has picked up, which could make movie theater stocks more appealing dividend picks.
The Top Dog
Regal Entertainment Group (NYSE:RGC) shows lots of movies. This company boasts that it’s the largest theater chain in the United States, and its 577 movie theaters could provide economies of scale advantages. Regal Entertainment Group (NYSE:RGC) reported good top-line results for the second quarter, with total revenue rising 16.5%. This theater chain also reported an impressive 34.2% increase in operating income.
Regal Entertainment Group (NYSE:RGC) reported a slight decrease in income for the second quarter, but this theater chain incurred an expense that may have helped address one of its main weaknesses. This theater chain offers the highest dividend yield in the group at 4.4%, but it has a book value of -$4.52 per share. Regal Entertainment Group (NYSE:RGC) reported a $30.7 million loss on debt extinguishment this quarter, a major expense for a company that had $36.1 million in net income. Even with its net income falling 3% for the quarter, this movie theater chain could be in better financial shape now.
The Turnaround Stock
Carmike Cinemas, Inc. (NASDAQ:CKEC)’s second quarter results definitely show improvement. This movie theater chain reported 25.8% revenue growth and 45.3% operating income growth for the second quarter. Carmike Cinemas, Inc. (NASDAQ:CKEC) CEO David Passman also provided another statistic that illustrates how all of these theater chains compare to their peers. According to Passman, overall United States movie theater admissions revenue rose 7.8% for the quarter.
Theaters and Hotels
The Marcus Corporation (NYSE:MCS)’ fiscal fourth quarter last year included an additional week. Even considering the timing factor, the company’s 55 movie theaters didn’t do very well this quarter. The Marcus Corporation (NYSE:MCS)’ theater admissions revenue dipped 13.7%, and theater concessions revenue dipped 8.4%. The company did report flat revenue growth from its hotel rooms, an improvement because of the timing factor.
The Marcus Corporation (NYSE:MCS) also blamed its film selection for its theaters’ weak fourth quarter results, but Regal and Carmike Cinemas, Inc. (NASDAQ:CKEC) still achieved higher sales with the films available last quarter.
The investment case for The Marcus Corporation (NYSE:MCS) still remains valid, though. Carmike Cinemas, Inc. (NASDAQ:CKEC) also announced that its third quarter 2013 results have been good so far, which suggests that Marcus could post better results for its 2014 first fiscal quarter. In the meantime, The Marcus Corporation (NYSE:MCS) has a 2.6% dividend, and this movie theater still wins the price to book comparison. Marcus’ 1.12 P/B ratio is less than Carmike’s 2.16 P/B ratio and Cinemark’s 2.99 P/B ratio.
International Theaters
Cinemark Holdings, Inc. (NYSE:CNK) offers a dividend along with international exposure. This movie theater chain owns theaters in multiple Central American and South American countries. Cinemark Holdings, Inc. (NYSE:CNK) has made a major investment in Latin America’s growth markets that could offer a big payoff. MPAA figures show that Latin America box office revenue grew 86% between 2007 and 2011. Cinemark Holdings, Inc. (NYSE:CNK) owns a total of 467 theaters, and 169 of its theaters are outside of the United States.
Cinemark Holdings, Inc. (NYSE:CNK) reports second quarter results on August 6, 2013. After Regal and Carmike’s reports, Cinemark’s prospects in the United States also look promising. This movie theater chain also offers a 2.9% dividend yield.
Takeaway
Overall conditions for movie theaters look good right now, and the theaters appear confident that they can deliver in upcoming quarters. Each theater has a different attraction for investors, though. Regal Entertainment Group (NYSE:RGC) pays out the biggest dividend. Cinemark Holdings, Inc. (NYSE:CNK) offers access to Latin America. Carmike provides a turnaround play. Marcus offers value and diversification. Personally, I selected Marcus, but all of these movie theater stocks show promise right now.
Eric Novinson owns shares of The Marcus Corporation. The Motley Fool has no position in any of the stocks mentioned. Eric is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article The Real Attraction of Movie Theaters originally appeared on Fool.com is written by Eric Novinson.
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