Dueling Fools: Cedar Fair Bull

Corporate acquisitions can be extremely painful for the purchaser's shareholders. The first year after a buyout can be especially unpleasant, given all the one-time costs involved in streamlining newly joined operations. All the synergies, cost savings, economies of scale, and other benefits that justified the purchase in the first place usually aren't seen until at least the second year, if not longer.

That's what makes Cedar Fair (NYSE: FUN) such an interesting investing prospect. Just about a year ago (in accounting terms, anyway), Cedar Fair bought the Paramount amusement parks from CBS (NYSE: CBS). The worst of the acquisition-related pain is likely behind the company now, leaving room for the expected benefits to start to shine through.

Bust through the pain
Of course, Cedar Fair took on a significant amount of debt to buy Paramount's amusement parks. The combination of the increased interest payments and acquisition-related depreciation and amortization has certainly done a number on the company's net profitability. Even so, digging just a little bit deeper than the "net profit" line on its most recent quarterly report shows some fairly good news behind the scenes:

	12 Months Ending 6/24/07	12 Months Ending 6/24/06	Y/Y Change
Operating Income	$216,595	$134,584	60.9%
Cash From Operations	$159,396	$153,912	3.6%
Distributions	$101,942	$99,511	2.4%

Even amidst the worst of the acquisition pain, Cedar Fair maintained its ability to generate the all-important cash flow from operations truly reflects a business's strength. Even more importantly, the firm kept -- and actually increased -- its already substantial dividend, while slightly lowering the fraction of its operating cash it actually paid out to investors. That's a phenomenal accomplishment for a company that just took on a significant debt burden to pay for an acquisition.

Show me the money
In fact, that ever-rising distribution is one of the things that attracts me so much to Cedar Fair. The amusement park operator is one of the elite businesses that has made Mergent's Dividend Acheivers list of companies that have hiked their distributions for at least 10 consecutive years. With only 330 firms qualifying for that badge of honor, Cedar Fair certainly sits among rarefied company. Perhaps you've heard of some of its fellow honorees:

Company	Market Cap (in Billions)	Yield	Y/Y Quarterly Dividend Growth
Cedar Fair	$1.48	6.8%	1.1%
3M (NYSE: MMM)	$62.68	2.2%	4.3%
PepsiCo (NYSE: PEP)	$107.40	2.3%	25.0%
Wells Fargo (NYSE: WFC)	$110.31	3.6%	7.7%
General Electric (NYSE: GE)	$389.97	2.9%	12.0%
ExxonMobil (NYSE: XOM)	$455.22	1.6%	9.4%

That's an amazingly strong group of companies to be part of. While the others may dwarf Cedar Fair in size, they certainly don't outclass it in yield -- or, frankly, in fun.

Get paid to wait
With its large, supported, and growing distribution yield, Cedar Fair is certainly taking care of its investors while they wait for the acquisition synergies to emerge. That payment certainly takes the edge off what otherwise could have been an extremely difficult year for its owners. Cedar Fair's solid history of strong payments also helps attract Motley Fool Income Investor subscribers to its shares.

Especially given the market's roller-coaster volatility lately, that cold hard dividend cash goes a long way towards assuring that investors can still be rewarded. And there's certainly nothing wrong with making money, even in a frothy market.

Think you're done with the Duel? Think again! Go back and read the other entries, sound off on Motley Fool CAPS, then vote for the winner.

Cedar Fair is an Income Investor recommendation, while 3M is an Inside Value pick. If you're ready to get paid by your investments, no matter what the market does to their shares, join us for your 30-day free trial of Income Investor today. Once you start getting paid well by the stocks you own, you'll be glad you checked us out.

Fool contributor Chuck Saletta lives close enough to Cedar Fair's Kings Island amusement park that he can hear the nightly fireworks. At the time of publication, Chuck owned shares of General Electric. The Fool's disclosure policy is a recovering cotton-candy addict.