Critical Analysis: Cedar Fair, L.P. (FUN) & Six Flags Entertainment Corporation New (SIX)

Cedar Fair, L.P. (NYSE: FUN) and Six Flags Entertainment Corporation New (NYSE:SIX) are both mid-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitabiliy, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.

Profitability

This table compares Cedar Fair, L.P. and Six Flags Entertainment Corporation New’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cedar Fair, L.P. 12.63% 724.36% 8.06%
Six Flags Entertainment Corporation New 8.26% -89.39% 4.24%

Volatility and Risk

Cedar Fair, L.P. has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500. Comparatively, Six Flags Entertainment Corporation New has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Insider & Institutional Ownership

51.9% of Cedar Fair, L.P. shares are held by institutional investors. Comparatively, 87.1% of Six Flags Entertainment Corporation New shares are held by institutional investors. 2.0% of Cedar Fair, L.P. shares are held by insiders. Comparatively, 6.9% of Six Flags Entertainment Corporation New shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Cedar Fair, L.P. pays an annual dividend of $3.42 per share and has a dividend yield of 4.8%. Six Flags Entertainment Corporation New pays an annual dividend of $2.56 per share and has a dividend yield of 4.4%. Cedar Fair, L.P. pays out 120.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Six Flags Entertainment Corporation New pays out 226.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cedar Fair, L.P. has increased its dividend for 4 consecutive years and Six Flags Entertainment Corporation New has increased its dividend for 7 consecutive years. Cedar Fair, L.P. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current recommendations and price targets for Cedar Fair, L.P. and Six Flags Entertainment Corporation New, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cedar Fair, L.P. 0 1 6 0 2.86
Six Flags Entertainment Corporation New 0 3 8 0 2.73

Cedar Fair, L.P. presently has a consensus target price of $74.29, suggesting a potential upside of 4.82%. Six Flags Entertainment Corporation New has a consensus target price of $66.50, suggesting a potential upside of 13.40%. Given Six Flags Entertainment Corporation New’s higher probable upside, analysts clearly believe Six Flags Entertainment Corporation New is more favorable than Cedar Fair, L.P..

Earnings & Valuation

This table compares Cedar Fair, L.P. and Six Flags Entertainment Corporation New’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cedar Fair, L.P. $1.28 billion 3.11 $450.35 million $2.85 24.87
Six Flags Entertainment Corporation New $1.30 billion 4.09 $406.63 million $1.13 51.89

Cedar Fair, L.P. has higher revenue, but lower earnings than Six Flags Entertainment Corporation New. Cedar Fair, L.P. is trading at a lower price-to-earnings ratio than Six Flags Entertainment Corporation New, indicating that it is currently the more affordable of the two stocks.

Summary

Six Flags Entertainment Corporation New beats Cedar Fair, L.P. on 9 of the 17 factors compared between the two stocks.

About Cedar Fair, L.P.

Cedar Fair, L.P. is an operator of regional amusement parks. The Company operates within a segment of amusement/water parks with accompanying resort facilities. As of December 31, 2016, the Company owned approximately 11 amusement parks, two separately gated outdoor water parks, one indoor water park and five hotels. The amusement parks include Cedar Point, located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Knott’s Berry Farm, near Los Angeles, California; Canada’s Wonderland, near Toronto, Canada; Kings Island, near Cincinnati, Ohio; Carowinds, in Charlotte, North Carolina; Dorney Park & Wildwater Kingdom (Dorney Park), in Allentown, Pennsylvania; Kings Dominion, near Richmond, Virginia; California’s Great America, in Santa Clara, California; Valleyfair, near Minneapolis/St. Paul, Minnesota; Worlds of Fun, in Kansas City, Missouri, and Michigan’s Adventure, in Muskegon, Michigan. It manages and operates Gilroy Gardens Family Theme Park in Gilroy, California.

About Six Flags Entertainment Corporation New

Six Flags Entertainment Corporation (Six Flags) is a regional theme park operator. The Company operates in the theme parks segment. The Company operates approximately 19 regional theme and water parks. Its parks occupy approximately 4,500 acres of land. Its parks are located in geographically diverse markets across North America. Its parks offer a selection of thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues and retail outlets. Its parks offer approximately 830 rides, including over 135 roller coasters. The Company’s parks include Six Flags America, Six Flags Discovery Kingdom, Six Flags Fiesta Texas, Six Flags Great Adventure & Safari/ Six Flags Hurricane Harbor, Six Flags Great America, Six Flags St. Louis, Six Flags Magic Mountain/ Six Flags Hurricane Harbor, Six Flags Mexico and Six Flags New England.

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