Concerned about the size of the State Pension you’re likely to receive come retirement? You may (or indeed, may not) be relieved to know that you’re not alone. I for one don’t think I would be able to survive on the pathetic 165-odd-pounds per week that the benefit currently provides once I stop working. It’s a reason why I have loaded my shares portfolio up with Cineworld Group (LSE: CINE).
The ubiquity of streaming services like Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN) Prime isn’t taking bites out of cinema audiences as was once predicted. It’s not that take-up of these services isn’t still growing at a rate of knots; it’s that the experience of watching movies at the local picturehouse is a completely unique, and ultimately timeless, one. This is evident in recent Comscore data which showed takings at the global box office soared to a record $41.7bn in 2018.
Film star As the world’s second-largest cinema chain, Cineworld is well placed to capture brilliant sales growth now and in the years ahead, I believe. And what’s more, the FTSE 250 firm is expanding rapidly to meet the soaring demand of film lovers in all its territories — in 2018 alone it opened 13 new cinemas, six apiece in the US and UK, and one in Romania.
City brokers believe conditions are ripe for the cinema chain to keep delivering annual earnings increases for the foreseeable future, and I can’t disagree, particularly as crowd-pleasing blockbuster movies, the lifeblood of Cineworld’s packed foyers, are growing more and more popular.
It may interest you to know that Disney saw films released under its own name, as well as those of its other production arms like Marvel Studios and LucasFilm, grossing an eye-popping $7.33bn around the world in 2018. This is only a fraction off the all-time high of $7.61bn that the so-called House of Mouse printed two years earlier.
One more dividend winner Despite its bright long-term growth outlook, however, Cineworld can be picked up for almost next to nothing right now, as illustrated by its forward P/E multiple of just 11.6 times. Throw a jumbo dividend yield of 4.6% into the equation and I reckon it’s a brilliant stock to buy and own today.
Whilst you’re here, I’d like to point out Bovis Homes (LON:BVS) Group (LSE: BVS), another dividend favourite from the FTSE 250 I believe is trading far too cheaply at current prices. The housebuilder carries a prospective P/E ratio of 10.5 times, but its low valuation is not the real showstopper: that accolade goes to the forward yield of 9.1% that it currently offers up.
Quite simply, I think Bovis is too good to pass up now, and I’d happily snap it up had I not already got significant exposure to the housing sector through Barratt and Taylor Wimpey (LON:TW). Bovis’s pre-tax profits of £168.1m in 2018 sailed past expectations and were up 47.4% year-on-year. Because of the gigantic — and still growing — homes shortage in the UK, I am confident that profits can continue heading skywards for many years into the future.
John Mackey, CEO of Whole Foods Market (NASDAQ:WFM), an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Royston Wild owns shares of Cineworld Group. The Motley Fool UK owns shares of and has recommended Amazon, Netflix, and Walt Disney (NYSE:DIS). Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2019