We're at the phase of the reopening play where experiences are starting to shine. We're going out. We're doing stuff. This has to be welcome news for Airbnb (ABNB 2.03%), EPR Properties (EPR 1.04%), and Six Flags (SIX 0.51%). The shift is real, and we've seen it play out in recent weeks as retailers stepped up to the plate with fresh financials.
"We are seeing our guests' increasing mobility and love of newness play out in their Target purchases as baskets shift more toward experiences and going-out categories," Target chief growth officer Christina Hennington said during the mass-market retailer's earnings call two weeks ago.
If you want to make money, you had better follow the money. Let's see why Airbnb, EPR Properties, and Six Flags are three stocks that have bright near-term futures.
Image source: Getty Images.
1. Airbnb
The travel industry is naturally going to be a major beneficiary of consumers budgeting for getaways this summer. There's no shortage of hotel operators, airline carriers, and cruise lines to consider, but don't assume that we're going to travel the same way we did before the pandemic.
Airbnb isn't a hotbed of cramped, noisy, cookie-cutter hotel rooms. There are now more than 6 million active listings on the platform, giving users the space, local color, and inspiration to make getaways memorable. Business was booming before the COVID-19 shutdown, and business is understandably starting to pick up again. Revenue soared 70% in its latest quarter.
Results might have been initially depressed in 2020 when the lockdown nipped the ability to travel, but Airbnb was one of the first hospitality plays to bounce back because crowd-evading travelers didn't want to spend time in packed hotels. It's one of the few lodging plays to already be well ahead of its pre-pandemic state. Trailing revenue is 38% ahead of where we were for all of 2019.
2. EPR Properties
You don't have to leave your area code to take in memory-making experiences. We're heading back to movie theaters, planning to visit water parks this summer, and gathering with friends at next-gen golf driving ranges over the weekend. EPR Properties is a real estate investment trust (REIT) that owns income-generating properties geared to experiential properties.
Multiplexes are a big part of the EPR story, representing 43% of its contractual cash revenue. Movie houses might not seem like a thriving business, but don't let the last two years dissuade you. Top Gun: Maverick shattered box office records for the Memorial Day holiday weekend, and this summer is going to be loaded with blockbusters.
Theater operators did a lot of things to stay alive. The country's largest player had to dilute its shareholders with a fivefold increase in its shares outstanding. The second-largest player had to shutter its operations twice before firing up its projectors. EPR Properties offers the benefits of the recovery of movie theater stocks without the dilution, as it's just collecting lease payments on the 175 movie theaters in its portfolio.
As a REIT, it naturally shares the wealth with its investors, and right now they're being treated to a beefy 6.4% yield.
3. Six Flags
National theme parks get all of the market's attention, but they are run by media giants that operate streaming services and broadcasting networks that stand to lose more than gain as we head outside again. Regional amusement parks give investors a pure play on day-trip escapism.
Six Flags is heading into its telltale summer operating season. Momentum is strong. Guests are willing to pay more for a day of white-knuckled thrill rides and family fun. Admissions revenue per capita rose 31% for its latest quarter, and in-park spending per guest is growing even faster. Amusement parks will be busy this summer.
Six Flags also has an exciting new CEO in Selim Bassoul who has succeeded in putting the pieces together in other industries. In other words, it's time to ride Six Flags.
