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5 Small Caps With Big Dividends

If you want to have your cake and eat it too, start with this list

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Regal Entertainment

Regal Entertainment NYSE:RGCDividend Yield: 5.5%
Market Cap: $2.4 billion

In February, I highlighted Cinemark Holdings (NYSE:CNK) as a top small-cap investment to buy for the big dividend … and since then, shares are up more than 30% on a share price basis alone!

I’m going back to the well on theater stocks this time around, picking smaller operator Regal Entertainment (NYSE:RGC) that operates about 6,600 screens in the U.S.

The movie industry might not be booming right now, but investors seem to be catching on to the potential of these companies should a broader recovery transpire and boost spending. Furthermore, a few high-octane 3D flicks for summer 2013 — including Iron Man 3 — could mean bigger margins.

There are risks here — including the idea that theaters just aren’t as attractive to consumers in this age of premium in-home entertainment options. Since peaking in 2002, total box-office admissions have declined in eight of the past 10 years, resulting in a total decline of 20%. But box-office revenue is up 12% over that period, for whatever that is worth.

Like television, I remain convinced that the familiar “old media” appeal of cinemas will never die despite a digital surge. After all, radio is still a viable form of communication — why write off everything but streaming just because you like your iPad?

That said, I leave you with one final consideration …

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