Cineplex (TSX:CGX) stock has failed to gain any significant traction in 2019 after its hot start in January. It battled headwinds in the broader industry as North America suffered one of its worst box office performances in years in the first two months of 2019. Cineplex and the sector at large reported an improvement in Q2 2019, but overall numbers are still down from a huge 2018.
The company is set to release its third quarter 2019 results as markets open on November 14. In the third quarter, total revenues rose 7.4% to $439.2 million, but theatre attendance was still down 1.7% from the prior year. Box office and concession revenues per patron fuelled growth at 2.9% and 8.8%, respectively.
Box office numbers in North America have improved quarter-over-quarter, according to data from ComScore, but ticket sales are still down from 2018. Another encouraging stat was the domination of the 18-34 demographic, which made up 52% of all crowds.
High youth engagement is a positive takeaway for an industry that is battling the meteoric rise of streaming services as an alternative.
Cineplex stock is trading just off its 52-week low as of close on October 25. The stock has dropped 4.9% in 2019 so far. Shares had an RSI of 29 at the time of this writing, putting Cineplex in technically oversold territory.
The stock offers a monthly dividend of $0.15 per share, representing a tasty 7.8% yield. Cineplex has been a frustrating stock, but the buy signal and the dividend are too tempting for me to pass up right now.
