FUN: Income and Entertainment
Its parks include Cedar Point located next to Lake Erie, Knott’s Berry Farm near Los Angeles, Canada’s Wonderland near Toronto, Kings Island near Cincinnati and Carowinds in Charlotte, North Carolina.
Among its other amusement parks are Dorney Park & Wildwater Kingdom in Allentown, Pennsylvania, Kings Dominion near Richmond, Virginia, California’s Great America located in Santa Clara, Valleyfair located near Minneapolis/St. Paul, Minnesota, Worlds of Fun in Kansas City and Michigan’s Adventure near Muskegon.
What makes Cedar Fair’s investment proposition so compelling is that not every family can afford or take the time to do the big Disneyland or Disney World trip.
However, they can make the time for a trip to a major regional amusement park that fits the budget of a greater number of fun seekers that can load the family into an SUV instead of paying individual air fares for each person, along with pricy hotel accommodations.
The formula has been working since the founding of the company in 1983. Indeed, the earnings for this master limited partnership (MLP) have been steadily feeding a rising quarterly dividend payout since 1987 that started out at $0.085 and is now 10-fold higher at $0.85 per share per quarter.
Annual total returns to shareholders have averaged 17% and, with the economy picking up speed and consumer confidence at a five-year high, the outlook for Cedar Fair is robust.
From a technical standpoint, the stock is in a powerful uptrend, evidenced by the upside breakout that corresponded with its earnings release and bullish forward guidance.
After hitting an all-time high of $69.81, the stock has been digesting its gains for the past month and is now emerging from that consolidation and looking as though it could rise to $75-$80, which is quite achievable given its strong fundamentals.
With the stock paying a current dividend yield of 5.00%, I find Cedar Fair a solid addition to our Safe Haven Portfolio for the summer season and beyond. Buy FUN under $70.