Amusement parks provide memorable outings for thrill seekers and families alike, but they can also provide enriching experiences for investors.
You can't buy into some of the country's beloved regional amusement parks. Holiday World in Indiana, Dollywood in Tennessee, and Knoebels in Pennsylvania are either family owned or privately held businesses. However, many of the country's largest theme parks and regional amusement parks are parts of publicly traded companies.
There are a few ways for investors to play the industry that's shaping up to have another strong summer with low gas prices and an improving economy. Let's take a look at the three best stocks to invest in amusement parks.
1. Disney (NYSE:DIS)
The world's largest theme park operator is also arguably the best. The family friendly media giant obviously isn't a pure play on its iconic theme parks. This is the company behind ABC, ESPN, Marvel, Disney Store, and now Star Wars.
However, as a well-oiled machine, it's amazing how so many of its properties wind up feeding the theme parks. And vice versa. Popular animated films become fodder for theme park rides and attractions, and, sometimes even a flagship attraction like Pirates of the Caribbean becomes a live action movie franchise.
Disney's theme parks and resorts division raked in $15.1 billion in revenue last year, up 7% from fiscal 2013 and accounting for 31% of Disney's total revenue. It's a scalable business given the large fixed costs associated with running its magnetic theme parks, so it's not a surprise to see operating profits soar 20%, nearly three times as hearty as the top-line spurt.
2. Six Flags (NYSE:SIX)
North America's largest amusement park operator in terms of number of parks owned is Six Flags with 18 gated attractions. Revenue climbed 6% to $1.2 billion in 2014 as a spike in revenue per capita was tripped up by a 2% slide in attendance.
The regional park chain is coming off a great year of pushing its season passes with its active pass base up an encouraging 25% in 2014. Annual pass holders tend to spend less at the park, but it's still a great way to fill up parks.
Six Flags could prove to be a potent export in the future. It struck development deals last year to explore Six Flags-branded parks in China and the Middle East. Six Flags also packs a healthy 4.3% yield, but that's not the highest payout in the industry.
For that we turn to our third and final entry.
3. Cedar Fair (NYSE:FUN)
Roller coaster fans know Cedar Point well. The waterfront park on the shore of Lake Erie has some of the country's most daring scream machines. It's one of the many parks owned by Cedar Fair which also watches over Knott's Berry Farm a few miles away from Disneyland.
Cedar Fair is coming off of its fifth consecutive year of record results. The growth isn't awfully impressive. Revenue inched a mere 2% higher in 2014 as a 3% uptick in average revenue per guest was held back by a 1% dip in attendance.
Cedar Fair fell short of Wall Street's profit targets in each of last year's quarters, but it's still in a good place. It landed Disney exec Matt Ouimet to be its new CEO three years ago, and patient investors are rewarded with a juicy 5.2% yield.