Six Flags Entertainment (SIX) markets its theme parks with the slogan: "Go Big! Go Six Flags!" By purchasing this stock, we're going big in search of sixteen percent total yearly returns, all thanks to an outdated stigma, asserts income expert Brett Owens, editor of Contrarian Outlook.

Contrarian investing works because it capitalizes on overly negative sentiment to find value. In the income world, this means buying when yields are abnormally high-and prices abnormally low-thanks to popular yet incorrect beliefs.

Corporate bankruptcies can be particularly profitable events for the strong-willed because they extinguish any and all hope. Buying formerly broke firms? Isn't that risky?

Well you know me, I'm risk averse and I'm not interested in buying firms as they emerge from bankruptcy. I only want to buy stocks in companies that are going to make it, so that I can hold them for many years. I also want them to pay me a dividend.

That's why I employ this income twist on bankruptcy buying. It helps me avoid the losers and bank safe double-digit returns while collecting dividend payments. The signal that a turnaround strategy is working is that management reinitiates and grows the dividend.

Six Flags took on too much debt a decade ago and had to declare bankruptcy in 2009. The board cleaned house and brought in a new management team that has been nothing short of excellent.

They quickly reinitiated the firm's payout in 2010 and have grown it aggressively since. In the last seven years, they've hiked the payout by a combined 173%!

For most of this time, Six Flags' payout dragged its shares higher like a magnet. But recently, the stock "decoupled" from its rising dividend, which is why we think we now have a great buying opportunity.

It is common for companies to take a short-term earnings hit as they transition from one-time sales to subscription models — which is what the company is doing with its new premium-tiered membership program.

It turns Six Flags' most loyal guests into more profitable members. They generate 3 times the current lifetime revenue of a regular season passholder. The membership base has increased more than 25% over the past year, helping drive 5% gains in attendance and revenue year-over-year.

CEO Jim Reid-Anderson believes they can sign up more than 50% of park visitors for memberships over the next few years! If successful, this will really juice cash flow.

Which, by the way, means more money in our pocket. The firm uses most of its free cash flow to pay and grow its dividend. Anything left over is generally used to repurchase shares, which is the gift that keeps on giving for us shareholders.

Over the past 10 years, Six Flags has bought back nearly one-quarter of the company. The management team been aggressive buyers of their own shares over the past couple of years. The big boss Jim Reid-Anderson owns nearly 3.5 million shares himself — a $200 million personal stake.

He and his team know that business is good, the recurring transition is rolling and their Board of Directors is likely to approve another dividend hike this November. Let's make sure we buy our shares today and "Go Big" before any big money managers wake up to this incredible bargain.

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