Cineplex Inc. (TSX:CGX) stock was down 0.58% in late afternoon trading on October 3. Shares are down 7.3% but have gained momentum since the summer. The stock is up 18.5% over the past three months. This is largely due to positive results at Cineplex combined with a return to form for the summer box office in 2018.
Last year, the North American box office turned in one of its worst performances since the early 1990s. Fortunately, this was not the case in 2018. So-called "Popcorn season", which came to an end on Labour Day, turned in $4.39 billion in 2018 according to comScore. This represents a 14.4% increase from the previous summer season of 2017.
There were several big blockbusters that propelled results in 2018.
Avengers: Infinity War was a massive hit that surpassed $2 billion worldwide. It is now the fourth highest-grossing film in history, right behind Star Wars: The Force Awakens which opened in late 2015. Other key contributors were Incredibles 2, Jurassic World: Fallen Kingdom, and Mission Impossible – Fallout.
In the second quarter, Cineplex saw attendance increase 5% year-over-year to 17.3 million which powered revenues to rise by 12.4% to $409.1 million. Box office revenues per patron and concession revenues per patron increased 4.4% and 9.3%, respectively. The company is expected to release its third-quarter results in early November.
Strong numbers in July and August should provide a boost for Cineplex.
The stock is well worth holding onto in October and also offers a monthly dividend of $0.145 per share representing a 4.9% dividend yield.
