Lucky Strike Entertainment (NYSE:LUCK) versus Cedar Fair (NYSE:FUN) Critical Analysis

Lucky Strike Entertainment (NYSE:LUCK) and Cedar Fair (NYSE:FUN) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Analyst Recommendations

This is a breakdown of current ratings for Lucky Strike Entertainment and Cedar Fair, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lucky Strike Entertainment	0	1	0	0	2.00
Cedar Fair	1	1	11	0	2.77

Lucky Strike Entertainment presently has a consensus target price of $12.00, indicating a potential downside of 2.36%. Cedar Fair has a consensus target price of $56.54, indicating a potential upside of 30.74%. Given Cedar Fair’s stronger consensus rating and higher probable upside, analysts clearly believe Cedar Fair is more favorable than Lucky Strike Entertainment.

Volatility & Risk

Lucky Strike Entertainment has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Cedar Fair has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500.

Insider and Institutional Ownership

68.1% of Lucky Strike Entertainment shares are owned by institutional investors. Comparatively, 64.7% of Cedar Fair shares are owned by institutional investors. 79.9% of Lucky Strike Entertainment shares are owned by company insiders. Comparatively, 1.8% of Cedar Fair shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Lucky Strike Entertainment and Cedar Fair”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lucky Strike Entertainment	$1.15 billion	1.56	-$83.58 million	($0.01)	-1,227.77
Cedar Fair	$1.80 billion	2.41	$124.56 million	($0.64)	-67.57

Cedar Fair has higher revenue and earnings than Lucky Strike Entertainment. Lucky Strike Entertainment is trading at a lower price-to-earnings ratio than Cedar Fair, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Lucky Strike Entertainment and Cedar Fair’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lucky Strike Entertainment	1.11%	-35.76%	1.68%
Cedar Fair	0.99%	113.05%	2.41%

Dividends

Lucky Strike Entertainment pays an annual dividend of $0.22 per share and has a dividend yield of 1.8%. Cedar Fair pays an annual dividend of $0.60 per share and has a dividend yield of 1.4%. Lucky Strike Entertainment pays out -2,197.8% of its earnings in the form of a dividend. Cedar Fair pays out -93.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lucky Strike Entertainment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Cedar Fair beats Lucky Strike Entertainment on 10 of the 16 factors compared between the two stocks.

About Lucky Strike Entertainment

Lucky Strike Entertainment Corp. engages in operating bowling centers. It offers entertainment concepts with lounge seating, arcades, food and beverage offerings, and hosting and overseeing professional and non-professional bowling tournaments and related broadcasting. The company was founded by Thomas F. Shannon in 1997 and is headquartered in Mechanicsville, VA.

About Cedar Fair

Cedar Fair, L.P. owns and operates amusement and water parks, as well as complementary resort facilities. Its amusement parks include Cedar Point located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Knott's Berry Farm near Los Angeles, California; Canada's Wonderland near Toronto, Ontario; Kings Island near Cincinnati, Ohio; Carowinds in Charlotte, North Carolina; Kings Dominion situated near Richmond, Virginia; California's Great America located in Santa Clara, California; Dorney Park in Pennsylvania; Worlds of Fun located in Kansas City, Missouri; Valleyfair situated near Minneapolis/St. Paul, Minnesota; Michigan's Adventure situated near Muskegon, Michigan; Schlitterbahn Waterpark & Resort New Braunfels in New Braunfels, Texas; and Schlitterbahn Waterpark Galveston in Galveston, Texas. The company also owns and operates the Castaway Bay Indoor Waterpark Resort, Hotel Breakers, Cedar Point's Express Hotel, and Sawmill Creek Resort. Cedar Fair, L.P. was founded in 1983 and is based in Sandusky, Ohio.