Six Flags Goes From Compelling High-Yield Dividend Play to Struggling Entertainment Stock
The last year has been no fun for Six Flags Entertainment (NYSE: SIX) shareholders. The stock fell nearly 20% in calendar year 2019, which turned out to be an omen of even more pain to come. In the course of just a couple months, the company went from what I thought looked like a compelling high-yield dividend stock to something more reminiscent of a brand in need of reinvigoration.
That's because shares have tumbled another 25% to start 2020. And that's because of bad news out of China and because new CEO Mike Spanos, his top team, and the board of directors have decided to cut the dividend payment to focus on getting customers back to its parks. Getting shot down by rival Cedar Fair late last year now looks like a blessing, as Six Flags now looks like the more likely takeover candidate.
In spite of all sorts of worry about the economy, consumer spending in the United States remained solid in 2019. However, that didn't quite pan out for Six Flags. Revenue declined 3% in Q4 to $261 million, driven by a 3% decline in guest attendance.
Source Fool.com
