Cineplex Inc (CGX.TO) Buy, Sell or Hold

Cineplex Inc (CGX.TO)

12.74

+0.30 (2.41%)

as of Sep 22, 2026, 8:00:01 pm Market Open.

343 watching

COMMENT

Diversifying, last quarter was good. Dividend safe. For his clients, not the best idea. Still holds personally. Undervalued here at $26. Looks like they're turning the ship around. Lot of free cash flow.

SELL

It's struggled over the years, taking free cash flow and investing in areas beyond the screen. They're in a declining business. He's been studying it, but hasn't stepped in. Be careful here. The 7% yield is safe for now, but he'd sell it now.

DON'T BUY

The future for them is focusing on their rec-room. Their menu boards have expanded into subway in the US. They are growing there. He has always thought the stock was overpriced because investors were chasing yield. After a weak first quarter, numbers were not that great. They pay out a lot of their cash flow. The movie theatre industry is not dead.

WEAK BUY

Dividend safe at 7.5%? CGX has an unsustainable 167% payout ratio to free cash flow. Their PE is pricey. They've spent a lot of non-movie ventures, but movies still account for 45% of business plus 25% in concessions. They need people coming into movie to attain growth. You can buy a little of this like around $23. It's an okay name, but has risk.

DON'T BUY

It has a strong position but in an industry that is in a secular decline. In the US we are seeing the same. The box office is not growing so they need to increase the ancillary revenues. He likes the strategy of the rec room and increase sales in liquor and pop corn. Still not enough for him to be a sleep well at night stock. (Analysts’ price target is $31.05)

TRADE

He owned in the past. He got stopped out. Yield is 7%. 1700 screens and 165 theaters. They don't have control over the film slate but they do have control on the 70 million people that come every year and diversifying the offering and they are doing that with the rec rooms and so forth. People are staying at hoe and watching Netflix. A tough one.

BUY

A past pick that he has owned and sold over the years. They're doing a good job with the Rec Room and golfing. It depends on the quality of the films. Great managers and pays a 6.7% dividend. NFL Sunday has potential.

DON'T BUY

Sold out. Under a lot of pressure with the box office environment. Facing secular headwinds. Tried to diversify, but problem is trying to find the next growth vehicle. Well run, disciplined management. But he's not looking at it.

COMMENT

They are diversifying away from movies through the Rec Room and launching more. They have to invest money in building this operation, so it'll take a few years before the Rec Room adds to the revenue stream. This will make Cineplex an all-around entertainment centre, not just movies. They're also moving into e-gaming. All this takes time to add to revenues and requires some debt now. The stock in 2017 came off because of weak movie releases and the general overhang in this sector is Netflix. But good movies will sell movie tickets.

COMMENT

Are the Rec Rooms really profitable? Their costs seems high, according to their reports. CGX is competing with streaming companies--not only Netflix, but Disney and others. But they have done a great job increasing their revenue in areas of food. Many people have big TV screens, too, which is another problem. CGX has been creative in bringing opera, live hockey and gaming to its cinemas.

BUY

He is looking at CGX-T as it has a fat dividend yield and the stock has come way off. It has been very well managed over the years. If they are successful on their games room they will do well. There could be an uptick in movie attendance over the next year. The only issue is that CGX's debt is constantly expanding. (Analysts’ price target is $31.00)

BUY

It's been a disaster for three years, but their multiple is slightly less than its U.S. peers and has a better balance sheet and further ahead in diversifying away from movie-going. It has one of the best management teams in Canada, but there's a misconception that movie-going is dead. That's incorrect. The dividend is safe. They've raised ticket prices and popcorn. The dividend is safe, because they're spending cash on growth projects. Their Rec Room has been doing very well, but be patient with Cineplex with a 2-3 time horizon.

WEAK BUY

It's been a rollercoaster, killed in Q4. but he's expected a big year in the cinemas in Q2 and Q3 with a lot of box office money to be made. Also, the Rec Rooms and selling wine and beer in all theatres are good diversifiers. CGX competes with home video streaming, though. CGX is priced at a big discount to its profits in Q2 and Q3 and to its American peers. This is a contrarian play on move-going.

DON'T BUY

They're up against streaming like Apple TV (announced today) and held hostage to the big movies they release--recent films have disappointed at the box office. Cineplex has diversified into the Rec Room. He has owned this. The 7.25% yield is sustainable and good. It's well-run, but in a changing industry and isn't sure they can keep up with changes. CGX is fairly valued now.

DON'T BUY

He's owned this from time to time, but CGX is frustrating. It plays the movie pipeline, hits or misses, the stock rises or falls. A good dividend player, but there are better dividend stocks.

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Cineplex Inc (CGX.TO)