|Forward P/E||5-year PEG||Price to Sales (ttm)||Return on Equity (ttm)||Debt to Equity||Profit Margin|
|Regal Entertainment||14.67||1.58||0.83||N/A||N/A |
($2.01 billion debt)
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.
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.
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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