Six Flags Entertainment Corp (SIX) Offers More than Just Thrills

Other peers

While Six Flags claims that there is no real competitive player in the regional markets, there are other theme park operators that are benefiting from economic recovery. These include SeaWorld Entertainment Inc (NYSE:SEAS) and Universal Parks and Resorts, the theme park division of NBC Universal, which is owned by Comcast Corporation (NASDAQ:CMCSA).

With its recent successful IPO, SeaWorld Entertainment Inc (NYSE:SEAS) connects people with nature and animals in an exciting and educational way. SeaWorld is well positioned for growth with its strong competitive edge due to its well-known diverse brands, differentiated theme parks, and the world’s largest zoological collections. On June 4, 2013, Wells Fargo initiated an “outperform” rating on SeaWorld with a price target of $40 to $42, indicating a 10% to 15% upside potential as of the closing price on June 5.

While NBC Universal suffered a 2.4% drop in revenue to $5.34 billion in the first quarter, its theme park revenue jumped 12.2%. The revenue was boosted by attendance growth at NBC Universal parks, which continued to benefit from the success of the “Harry Potter” attraction in Orlando and the “Transformers” attraction in Hollywood. The company’s theme parks segment now generates the highest margin of Universal’s parent, Comcast Corporation (NASDAQ:CMCSA), contributing $953 million in operating cash flow with $2.1 billion revenue in 2012.

Bottom line

By emerging from bankruptcy and significantly reducing its debt, Six Flags is now in much better position financially to leverage its assets. With highly focused strategy and continuous innovation, more long-term growth is expected for Six Flags while it keeps improving its fundamentals.

The article Six Flags Offers More than Just Thrills originally appeared on Fool.com and is written by Nick Chiu.

Nick Chiu has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Nick is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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