Most of you know I like my retirement portfolio ideas in essential industries: products you have to have to live. Well, today’s idea isn’t exactly essential, but it never seems to have a bad year either… the movies.
Even during the Depression, the movies saw strong sales and earnings, and it seems the tougher the times the more people want the escape of a good movie.
Cinemark Holdings (NYSE: CNK) operates 504 movie theatres in North, Central and South America with 5,794 screens. That’s a lot of movies.
And its numbers for the past five years and estimates for the next five years are nothing short of stunning.
In the past five years, Cinemark posted 11.6% annual earnings growth, 5.27% dividend growth and 8% revenue growth. In the next five years, analysts estimate the company will grow earnings by 15% a year, sales by 8.8% and revenues by 8.5%.
In fact, in the next reporting period earnings are expected to increase 32% over last year.
The chart below shows the actual one-, three- and five-year growth numbers posted by Cinemark. They are impressive to say the least.
(And as I already pointed out, analysts predict even higher percentages for revenue and earnings.)
The current yield is a very respectable 3.1%, and with the growth rates this one is expecting, this should be a solid payer for some time to come.
No, it is not water, energy, clothing or food, but it is something we just can’t seem to do without.
Bet on the movies.