Why Six Flags Entertainment Stock Climbed 13.9% in November

MarketsMotley Fool

What happened

Shares of Six Flags Entertainment (NYSE: SIX) rose nearly 14% last month, according to data provided by S&P Global Market Intelligence. The amusement park operator boosted its dividend, helping its stock recover from its October swoon.

Continue Reading Below

So what

After falling more than 20% in October following a third-quarter earnings report that fell short of Wall Street's expectations, Six Flags entered November poised for a rebound. That's because while the company managed to deliver only 2% earnings growth in the quarter, it was able to grow its revenue by 7%. This revenue increase was driven mostly by higher traffic at its parks, showing that demand for its amusement and water park offerings remain strong.

Moreover, the sharp plunge in the company's stock price pushed its dividend yield up a full percentage point to about 5.8% by the end of October. This helped Six Flags pop up on some income-focused investors' radars, and likely drove increased demand for the stock in November.

Six Flags' stock-price gains accelerated after the company announced on Nov. 14 that it would be increasing its quarterly dividend payout by 5%, to $0.82 per share, beginning in the fourth quarter. Combined with a prior dividend raise in February, this represents a 17% year-over-year increase in Six Flags' dividend. It also marks the eighth consecutive year that the company has boosted its payout to investors.

Now what

Six Flags' stock has pulled back along with the overall market in December. With shares down about 5% this month, they're currently yielding more than 5.6%. That's likely to keep this high-yield stock on some dividend investors' buy lists heading into 2019.

10 stocks we like better than Six FlagsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Six Flags wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 14, 2018

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.