Kinepolis Group (Brussels:KIN)

Kinepolis Group is a Belgian cinema operating company in Western Europe. Kinepolis Group operates 23 complexes in Belgium, France, Spain, Poland and Switzerland, with a total of 317 cinemas. It employs over 1,900 people. In addition to its cinema business, Kinepolis is also active in film distribution, the sale of on-screen advertising, property management in the cinema sector and the sale and installation of projection and sound equipment.

The Kinepolis Group was founded in the 1960s, when the late Albert Bert and his sister-in-law Rose Claeys-Vereecke expanded the Majestiek neighbourhood cinema in Harelbeke into a two-screen complex – the very first ‘multiplex’.

In 1988, the Bert family built the Kinepolis Brussels in the Heysel district on the former site of the General Motors factory (which explains the typical spiral structure of the large car parks allowing access from one floor of the complex to another); it was then the first European multiplex. Its success led to a major renewal of the cinema stock in Europe in the following two decades.

With its IPO in 1998 and its international expansion since the second half of the 1990s, Kinepolis Group has become a leading cinema operator in Europe. However, the group has retained the same innovative energy and customer focus that motivated the founders at the origin of the adventure. In terms of technology, this has resulted in the move to digital cinema and the development of 3D screening rooms. In terms of content, the offering has been supplemented in an alternative manner, with classic feature films alongside sporting, cultural and social events.

Kinepolis offers a modest current yield of 1.9%, slightly below its long-term average (2.57%). On the other hand, the average annual growth is particularly strong at 25.52%. In addition, the distribution ratio remains at very cautious levels, at only 23.30%.

While the fundamentals from a dividend perspective may attract more than one, the volatility of Kinepolis could, on the other hand, scare off many investors, with 38.46%. With such figures, you have to have particularly strong nerves. On the other hand, despite a price variation worthy of a roller coaster, KIN is relatively insensitive to market variations, with a beta of 0.68.

KIN, listed in euros, has the advantage of reacting favorably to a fall in the dollar, which is confirmed by a $risk of -0.46. A fall in the greenback therefore tends to have a favorable impact on the value of KIN's share price in CHF. But the reverse is of course also true. The stock can therefore represent good diversification, or even a hedge, for a portfolio strongly oriented towards USD.

In the end, we can say that Kinepolis does not do things by halves, as much for its cinemas as for its share price and its dividends. The yield is modest but is progressing at the speed of a rocket. Despite this, the distribution ratio remains very prudent. The volatility is very high, but in return the title offers good diversification/protection in USD-oriented portfolios. Ultimately, KIN gets 4 stars, which is a very good profitability/risk ratio. But beware of volatility. Not only do you have to have strong nerves, but there is also a significant risk of getting in at the worst possible time!

Sources: Yahoo Finance, Kinepolis, Swissquote, dividends.ch