There are still many people out there who believe that the omnipresent presence of piracy, and the rising might of streaming giants like Netflix, represent the death knell for the film industry. However, all evidence suggests that cinema has never been in better health.
Despite the impact of illegal downloads and the ‘Netflix and chill’ phenomenon, the staying power of the cinema continues to be perfectly illustrated. Grabbing a movie isn’t just about the film itself, after all, it’s a fun and relatively cheap way for friends and family to spend the evening together, thanks to membership schemes like Cineworld’s (LSE: CINE) ‘Unlimited’ programme.
Besides this, while the popularity of 3D may be on the wane, the beauty of the big screen remains something that filmgoers find hard to resist. Visual masterpieces like the blockbusters thrown out by Marvel Studios and Lucasfilm demand to be seen in the cinema, and Joe Public tends to agree, so the conveyor belt of such films is keeping box office sales steaming higher.
Indeed, sales figures from latest superhero steamroller Avengers: Infinity War must be seen to be believed. The latest outing by Captain America, Iron Man et al has set all-time box office records in countries all over the world and it is on the cusp of barging through the $2bn barrier for worldwide cinema takings.
And a raft of new billion-dollar titles, like Solo: A Star Wars Story and Ant-Man and the Wasp this summer alone, should keep people clicking through the theatre turnstiles.
Great expectations
Against this backcloth, and helped by the recent entry into the US with the acquisition of picturehouse chain Regal Entertainment, City analysts are expecting earnings at Cineworld to detonate this year and beyond.
Profits are expected to advance 161% in 2018, and a 20% rise is tipped for next year as well. Predictions of such rampant growth make the FTSE 250 business terrific value for money — it changes hands on a forward P/E ratio of 13.3 times right now — while also supporting massive dividends.
A 10.5p per share payout is predicted for this year, and a 12.5p one for 2019, figures that create meaty yields of 4% and 4.7% respectively. And thanks to Cineworld’s expansion into North America (not to mention across the UK and Central and Eastern Europe too), I am backing the cinema star to deliver exceptional returns long into the future.
Another big yielder
Centamin (LSE: CEY) is another FTSE 250 share that investors should consider buying today and stashing away for the years to come.
Gold has lost its lustre more recently and this week tipped back below the $1,300 per ounce barrier for the first time since December. However, exposure to the ultimate safe-haven asset is a sage move to protect your share portfolio once the next macroeconomic or geopolitical shock hits. And buying into a miner rather than buying gold itself is an easy way to play the gold investment story.
Besides, mining giant Centamin can be picked up extremely cheaply right now, an anticipated 40% earnings rise this year creating a forward PEG multiple of 0.4. And the mining company also offers chunky dividends of 8.9 US cents for this year and 10.8 cents for 2019, or so say City analysts, resulting in yields of 4% and 4.9% for these respective years.