Cineplex Offers a 7.1% Monthly Dividend: Here’s Why You Should Buy the Post-Earnings Dip

Cineplex (TSX:CGX) stock fell 1.03% on May 16. Shares have now entered negative territory for the full year. The stock started out the year hot but fell sharply after a disappointing fourth-quarter and full-year report for 2018. North American cinemas had a rough start to 2019, reporting some of the worst attendance and revenues in a decade.

That broad weakness was reflected in the most recent earnings report for Cineplex. Total revenues fell 6.6% year-over-year to $364.9 million and theatre attendance plunged 15.6% to 15 million. As usual box office revenues per patron and concession revenues per patron enjoyed an uptick.

There is reason for optimism in the final three quarters of 2019. Avengers: Endgame has dominated the box office since its late April release. It has raked in over $730 million at the domestic box office and over $2.5 billion worldwide. Endgame is poised to pass Avatar as the second-highest domestic gross of all-time, behind Star Wars: The Force Awakens.

Cineplex has a big late spring and summer season to look forward to, as films like Aladdin, Toy Story 4, Spider-Man: Far From Home, and others gear up for a big release.

Cineplex announced a 3.4% increase to its monthly dividend. It will now pay a $0.15 monthly dividend, which represents a tasty 7.1% yield. Shares are currently trading at the low end of its 52-week range. It has not dropped into technically oversold territory, but Cineplex is a nice pick up for income investors in the middle of May.