The Walt Disney Company (DIS), Cedar Fair, L.P. (FUN), Six Flags Entertainment Corp (SIX): Play Time in the Stock Market

The partnership’s top line appears to be growing again after stagnating during the recession. And, after taking on too much debt during a big merger led to a cut, the distribution is heading higher again. Because it’s an LP, you can’t value Cedar Fair, L.P. (NYSE:FUN) the same way as regular companies. However, for income seekers, this is a good option.

Water world

New to the industry, at least publicly, is SeaWorld. The company runs the SeaWorld, Bush Gardens, and Sesame Street parks. There isn’t much historical data to go on when considering this stock, but it offers a good combination of excitement and unique theme so that its parks are both differentiated and destination-worthy trips. And while The Walt Disney Company (NYSE:DIS) has co-opted the jungle park (Animal Kingdom), it has yet to attempt to compete with SeaWorld.

SeaWorld’s top line came in at $1.4 billion in 2012, with earnings of around $0.90 a share. It clearly has a good business. However, the shares trade with a PE of nearly 40. That could make owning the shares almost as thrilling as going to the company’s parks. Investors should keep this one on a watch list for a pullback.

A quick turn

Six Flags Entertainment Corp (NYSE:SIX) has re-emerged from the ashes of bankruptcy as a much stronger company. The top line fell during the recession, but is again on an upward path. And 2012 marked the dramatic end to a long streak of red ink when earnings per share jumped from a loss of around $0.20 in 2011 to nearly $3.20 a share. The company’s renewed strength is also highlighted by its initiation of a dividend.

This might be the best value in the industry, as the company’s PE is only around 10. Moreover, it offers income seekers a yield of about 4.8%. Like Cedar Fair, most of its parks are seasonal, so quarterly earnings are lumpy. But, the turnaround here has been notable.

Big money = Big fun

Amusement parks are great fun and anyone who has been to one knows that they are an expensive trip. Investors can benefit from that by owning shares in publicly traded parks. The Walt Disney Company (NYSE:DIS) is the biggest and best, but is much more than just amusement parks. SeaWorld has parks of a similar caliber, but appears expensive based on its short history as a public company. Cedar Fair and Six Flags Entertainment Corp (NYSE:SIX) both focus on regional parks and returning cash to investors. That should make the pair the most interesting of the quartet, particularly for income investors.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Walt Disney (NYSE:DIS). The Motley Fool owns shares of Walt Disney.
Reuben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Play Time in the Stock Market originally appeared on is written by Reuben Brewer.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.