Whether its an evening after a long work day or the much-anticipated weekend, we all need time to relax, unwind or let loose.
For some, that means binge-watching a show on Netflix (NFLX) or tuning into a local sports game. For others, it means mindlessly browsing Facebook (FB) or spending endless hours playing video games. The list goes on: concerts, amusement parks, movies, shopping …
Of course, a number of publicly traded stocks — whether it’s diversified giants like Disney (DIS) or niche names like Polaris (PII) — love our downtime, because we’re likely putting money in their pockets to enjoy ourselves.
However, three entertainment-focused dividend stocks at least give a little back, not only by providing a little fun, but by offering up a steady payout. Let’s take a look:
Dividend Yield: 3.4%
Hasbro (HAS) probably kept you entertained as a kid, it might keep your own kids entertained now … and hey, if you’re a board game-lover like me, it might still be the center of your good, old fashioned fun.
Besides kid toys like Tickle Me Elmo, the game-maker is also responsible for classics like Monopoly, Yahtzee, Trivial Pursuit and Scrabble — my family’s personal favorite.
If you’re less into dice and more into income, though, HAS has you covered. Hasbro offers a 40-cent quarterly dividend that translates to a roughly 3.4% — not bad considering the stock’s 30% year-to-date run.
Earnings slipped in most recent quarter — a reality blamed on boy toy weakness — however, Needham & Company analysts still upgraded Hasbro stock to a “buy” afterward, citing increased strength and visibility in gaming. Its $52 target still is good for double-digit upside.
Hasbro also has some promising deals in its corner. It just extended its partnership with Disney for merchandising rights to Marvel characters, and has rights to the Star Wars franchise through 2020 — good news considering a new trilogy is on its way.
Those long-term tailwinds — combined with Hasbro’s $245 million free cash flow and more than $1 billion in cash — should keep Rich “Uncle” Pennybags smiling all the way to Go.
World Wrestling Entertainment
Dividend Yield: 4.7%
Even if you don’t personally tune into World Wrestling Entertainment (WWE) matches, you’re likely familiar with the organization, its loyal followers, its stars — including John Cena and The Rock — and shows such as Raw and SmackDown.
Not many people are as familiar with its stock. However, while the $1 billion company only has volume of about 130,000 shares a day, it’s a powerful income player at a 4.7% yield that has outperformed the market with 30% gains.
WWE missed expectations in the most recent quarter, in part thanks to an 18% slide in pay-per-view purchases. Nonetheless, Roth Capital recently issued a “buy” call on WWE, noting that “TV contract renewals may come sooner than expected, its steady dividend pays investors to wait, and a cash flow turnaround in Films division under way.”
That cash flow turnaround — which builds on current annual operating cash flow of $69 million and cash reserves of $66 million — should help maintain WWE’s payout. And while WWE’s current payout ratio is north of 100%, the company’s annualized five-year earnings growth of 18% should also help keep things rolling.
Also, WWE has been rewarding investors for more than a decade.
Regal Entertainment Group
Dividend Yield: 4.6%
Finally, we have a slightly more common form of viewing entertainment: the movies. Regal Entertainment Group (RGC) operates more than 6,600 screens in over 500 theaters across 37 states.
It also pays out a 21-cent quarterly dividend that currently yields 4.6% amid the stock’s 27% year-to-date run.
RGC’s dividend did take a hit during the recession, dropping from 30 cents, but the payouts didn’t die out, and the dividend is now 20% higher than it was in early 2009.
Plus, while chatter about the end of the box office has been going on for some time, Regal seems to be doing just fine. In the most recent quarter, RGC beat earnings and revenue expectations, with CEO Amy Miles calling the environment healthy and adding that she was optimistic about the current period.
There’s no sign that the end of the dividend is near either. In the first half of the year, Regal had $208 million in free cash flow, while it totaled more than $350 million last year. So while the company’s current 84-cent annual payout is nearly 75% next year’s expected earning, it’s less than 40% of that free cash flow.
So go ahead: Grab some popcorn, and enjoy the show — and your payouts.
As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.