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SeaWorld Entertainment Inc (SEAS), The Walt Disney Company (DIS): Theme Parks Are Good for Investments and Memories

Earnings that make a berry farm look good

Cedar Fair, L.P. (NYSE:FUN) owns 11 amusement parks, four outdoor water parks, one indoor water park and five hotels. The company includes Kings Dominion, Worlds of Fun, Knott’s Berry Farm, Great America, King’s Island, and Cedar Point.

Cedar Fair, L.P. (NYSE:FUN) reported improved revenue for the first quarter of $41.8 million. GAAP reported sales were 48% higher than the prior-year quarter’s $28.2 million.

Historically, first quarter results represent less than 5% of the company’s full-year revenues as the vast majority of its world-renowned parks and facilities are closed during this quarter. As a result, the company typically operates at a loss during this period.

The increase was primarily due to the strong attendance and in-park guest per capita spending at Knott’s Berry Farm, the company’s only year-round property. The improved results at Knott’s Berry Farm are attributable to recent investments the park has made over the past year to revitalize the park and enhance the overall guest experience. The company also said that the calendar anomaly helped boost returns as well.

A trip to Knott’s Berry Farm for four individuals, plus one car, for one day will set you back a total of $192.95.

Rollercoaster ride

Six Flags Entertainment Corp (NYSE:SIX) went public in 1996, and if the joke weren’t so obvious to make, you might think that the firm’s earnings coined the inevitable rollercoaster jokes. When the economy went south, so did Six Flags Entertainment Corp (NYSE:SIX). The company filed Chapter 11 bankruptcy in 2009, restructured, and came back to the Street in 2010, where it now sees significant quarterly growth.

Similar to Cedar Fair, most of the amusement parks operated by Six Flags are not “distance destinations.” They are within a few hours of driving of most customers, and are just a day trip experience, and not a large scale family vacation. In theory, this means that when a family cannot afford to go all the way to The Walt Disney Company (NYSE:DIS) or Universal on vacation, they can settle for a closer to home option. Because of this, the company is not as heavily impacted by a sour economy as other parks may be.

For its most recent quarter, the company reported $87.5 million in revenue, an increase of 31.8% compared to same quarter the previous year. The stock is up more than 27% year-to-date and boasts a dividend yield of 4.8%.

Attendance in the first quarter increased 525,000 or 41% to 1.8 million guests. Approximately half of the 525,000 attendance gain resulted from the benefits of the odd calendar year mentioned before.

Two adults, two individuals shorter than 48”, and one vehicle can visit Six Flags Magic Mountain for a mere $195.95.*

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