Should You Buy Cineplex Ahead of its Q2 Results?

Cineplex (TSX:CGX) stock fell 1.61% on July 30. Shares have climbed 4.2% over the past month. Cineplex stock is still down 2.3% in 2019 so far.

North American cinemas got off to a dreadful start in 2019. January and February saw some of the worst ticket volumes and revenues in nearly a decade. This was largely due to the barren movie slate, but this situation quickly improved in the spring.

The big story was Avengers: Endgame, which shattered records early in its run and recently managed to pass Avatar as the top grossing movie of all time. Cineplex posted a poor first quarter, but we can expect a more positive picture in Q2. It is expected to release its second quarter 2019 results in early August.

This summer box office has disappointed in comparison to the prior year, but Spiderman: Far From Home and The Lion King provided a much-needed boost. Both have exceeded the $300-million mark at the domestic box office. In August movies like Hobbs & Shaw and Dora and the Lost City of Gold are expected to pick up the slack. Still, we’re probably looking at a dip year over year.

Cineplex possesses a P/E ratio of 29 ahead of its next earnings release. This is not a favourable position value-wise, but the stock does boast a monthly dividend payout of $0.145 per share.

This represents an attractive 7.5% yield. Shares are still trading at the low end of its 52-week range. I still like Cineplex as an income play ahead of its earnings release.