IMAX Corporation (USA) (IMAX): Maximum Growth, Minimum Risk – Regal Entertainment Group (RGC), Cinemark Holdings, Inc. (CNK)

Forward P/E 5-year PEG Price to Sales (ttm) Return on Equity (ttm) Debt to Equity Profit Margin
IMAX 19.86 1.36 5.96 18.54% 4.35 14.58%
Regal Entertainment 14.67 1.58 0.83 N/A N/A
($2.01 billion debt)
5.13%
Cinemark Holdings 13.02 0.96 1.25 16.18% 176.11 6.83%
Best Value Cinemark Cinemark Regal IMAX IMAX IMAX

Source: Yahoo Finance, March 9.

Based on these metrics, we can see that IMAX is trading at a premium, albeit a well-deserved one, considering its beefier margins and lower debt levels. While Cinemark Holdings, Inc. (NYSE:CNK) has grown over the past five years, its growth has been slow in comparison to IMAX. The reason is simple: whereas Cinemark Holdings, Inc. (NYSE:CNK) and Regal Entertainment Group (NYSE:RGC) must increase their expenses to adopt IMAX technology in their aging theaters, IMAX simply profits from the shift.



RGC Revenue TTM data by YCharts

Regal Entertainment Group (NYSE:RGC) has fared the worst over the past five years, despite fairly strong growth in earnings. However, dwindling top-line growth sank Regal Entertainment Group (NYSE:RGC)’s shares, which have performed the worst.



IMAX data by YCharts

The Foolish Bottom Line

Investing in IMAX depends on one central thesis – will movies get progressively bigger and more dazzling, requiring the largest screens enhanced with 3D technology to view in their fully intended glory?

If so, then IMAX – with its growing brand, insulated business model, coupled with strong top and bottom line growth – just might be one of the strongest investments of this decade.

The article IMAX: Maximum Growth, Minimum Risk originally appeared on Fool.com and is written by Leo Sun.

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