7 Safe High-Yield Dividend Stocks: Cedar Fair (FUN)
FUN Dividend Yield: 5%
The ticker symbol for Cedar Fair, L.P. (NYSE:FUN) alone should make the stock a buy.
OK, no it shouldn’t. But there are fundamental reasons for a long position as well — even beyond an attractive 5% yield.
For one, Cedar Fair’s operating results continue to be solid. After growing revenue and adjusted EBITDA 7% in 2015, Cedar Fair just announced another record-setting year. Revenue increased 4% in 2016, and adjusted EBITDA rose 5%. FUN now expects to reach its long-range target of $500 million in pre-tax profit by the end of this year — a full year earlier than originally projected.
There are some concerns here.
The most obvious is that the amusement park business can be cyclical. An economic recession that crimps consumer spending can have a significant impact on Cedar Fair’s attendance, revenue and profits. FUN has exhausted its tax assets, too, and will return to paying cash taxes this year. (Corporate tax reform could cushion that blow, however.) And the company’s status as a limited partnership can add a touch of complexity to investor tax returns.
Still, at a 5% yield, with distributions growing steadily and recent projects boosting attendance, Cedar Fair looks worth the risk and the hassle. The stock is valued cheaper than rival Six Flags Entertainment Corp (NYSE:SIX), and offers a better dividend yield to boot.
That makes FUN a worthwhile target for investors seeking high-yield dividend stocks.