NEW YORK, Oct 10 (Reuters) - Fears that Hollywood will drastically reduce the time between a film's premier and television debut are likely unfounded, making shares of the largest publicly traded U.S. theater operators a potential bargain, according to a report in Barron's.
Both Regal Cinemas and Cinemark pay decent dividends and have growth prospects as they outfit more of their theaters for 3D films that carry higher ticket prices, the report said.
Cinemark also has a fast growing Latin American operation that accounts for 25 percent of its revenue fueled by a 40 percent revenue jump in the first half of the year, while Regal may boost its dividend by the end of the year, Barron's said in its Oct 11 edition.
'The bottom line is that theater stocks are cheap on a free-cash flow basis and pay ample dividends,' Barclay's Capital analyst Anthony DiClemente told Barron's. 'They're well suited to income and value investors looking for businesses that generate a lot of cash.'
DiClemente has a $19 share price target on Regal and a $20 target on Cinemark shares.
Regal shares closed at $13.79 on Friday, while Cinemark shares closed at $17.13 both on the New York Stock Exchange.
(Reporting by Bill Berkrot) Keywords: REGAL CINEMARK/ (bill.berkrot@thomsonreuters.com; +1 646 223-6030; Reuters Messaging: bill.berkrot.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Both Regal Cinemas and Cinemark pay decent dividends and have growth prospects as they outfit more of their theaters for 3D films that carry higher ticket prices, the report said.
Cinemark also has a fast growing Latin American operation that accounts for 25 percent of its revenue fueled by a 40 percent revenue jump in the first half of the year, while Regal may boost its dividend by the end of the year, Barron's said in its Oct 11 edition.
'The bottom line is that theater stocks are cheap on a free-cash flow basis and pay ample dividends,' Barclay's Capital analyst Anthony DiClemente told Barron's. 'They're well suited to income and value investors looking for businesses that generate a lot of cash.'
DiClemente has a $19 share price target on Regal and a $20 target on Cinemark shares.
Regal shares closed at $13.79 on Friday, while Cinemark shares closed at $17.13 both on the New York Stock Exchange.
(Reporting by Bill Berkrot) Keywords: REGAL CINEMARK/ (bill.berkrot@thomsonreuters.com; +1 646 223-6030; Reuters Messaging: bill.berkrot.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.