Twenty-First Century’s latest movie to hit the theaters was “The Wolverine.” The movie was the top movie during its weekend release in the U.S., grossing $55 million in sales. The company also plans to produce “X-Men: Days of Future Past” next year.
In July, Deutsche Bank slapped a $36 price target on the company, nearly 15% upside from where it currently trades. Driving the price-target increase? Deutsche notes that Twenty-First Century has the “fastest growth prospects among the entertainment group…is trading at 9.3x CY14E EV/EBITDA and 17x P/E, or a 0.86x PEG ratio, cheapest in media (avg 1.11x).”
Thanks to the shedding of the publishing assets, which now trade as News Corp, the stock is expected to grow EPS at an annualized 12% over the next five years, according to analysts.
The company is also set to release its first quarterly results since the spin-off next week. Consensus is for EPS of $0.34. For 2Q 2012, the combined publishing and entertainment company posted a loss of $0.64 per share.
Moviegoer
The best way to enjoy Twenty-First Century’s great movies? By actually going to the movies. This $15-billion industry is dominated by the likes of Regal Entertainment Group (NYSE:RGC). Regal has the largest network of theaters in the U.S. The company has over 7,300 screens in 578 locations across 42 states.
The company gets around 70% of revenue from admissions and almost 30% from concessions. It has been improving its screens, having upgraded nearly 40% of its screens to 3D screens as of the end of 2012. The summer lineup is also encouraging for boosting full-year 2013 revenue; these include such moves as Hunger Games 2 and Hobbit 2.
Second-quarter EPS came in at $0.36 compared to. $0.25 for the same period last year, with overall attendance and average ticket price both up year-over-year. The theater operator also pays an impressive dividend yield at 4.4%.
Bottom line
I think entertainment will be a great way to profit in the long term. All the stocks above have a solid position in their respective industries, and are great plays on a rebounding economy. Who doesn’t love to go to theme parks, play video games and watch movies? I know I do.
Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard. The Motley Fool owns shares of Activision Blizzard.
The article Entertaining Your Portfolio originally appeared on Fool.com and is written by Marshall Hargrave.
Marshall 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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