Key Points
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AMC exceeded market expectations with its latest financial results after market close on Wednesday.
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IMAX shares have popped eightfold since bottoming out when movie theaters were temporarily closed in early 2020.
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EPR Properties yields 6.1%, and more than a third of its annualized base rent comes from multiplex operators.
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Movie theaters weren’t supposed to survive the pandemic. With shelter-in-place orders, studios pushed out their high-profile releases. In some cases, they skipped theatrical distribution and sent films directly to the streaming market.
Life wasn’t a cakewalk for those who braved the safety hurdles to see a low-profile release in an empty theater in the first few months of the crisis. How much high-margin popcorn and beverages would customers buy under masking requirements?
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I remember when director Christopher Nolan pushed to get Tenet out in theaters that summer, months into the recovery process. It was the first big-budget movie to test the chilly waters with a theatrical release. I went to see it during its opening weekend. There were fewer than a dozen of us scattered inside the cavernous theater.
It wasn’t a smooth recovery. It was a three-hour epic with a satisfying finish. The industry finally got its happy ending. Ticket sales are back to pre-pandemic levels. Snacks, beverages, and collectibles are selling better than ever.
How do you play the surprising turnaround? I have some ideas. You should “screen” AMC Entertainment (NYSE: AMC), experience enhancer IMAX (NYSE: IMAX), and multiplex landlord EPR Properties (NYSE: EPR). Let’s take a closer look at three stocks that are crushing the market this year.
1. AMC Entertainment
AMC stock is one of just 60 companies with market caps above $3 billion to have more than doubled in 2026. The list is loaded with tech, AI, and biotechnology plays. AMC is one of the few consumer-facing businesses on that list.
Revenue jumped a better-than-expected 32% to $1.7 billion in Wednesday afternoon’s third-quarter report, pushing year-to-date top-line results 22% higher. Adjusted earnings of $0.13 a share reversed a year-ago loss. AMC is now profitable through the first three months of the year, something that it hasn’t done since 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) nearly tripled.
The same business that was hyped and then blasted in the meme stock frenzy has just delivered record revenue and adjusted EBITDA in back-to-back quarters. Bears will argue that these are far from being records on a per-share basis. The company significantly diluted its shareholders with a deluge of stock offerings in the early years of the recovery.
Some smaller exhibitors have been profitable for a couple of years now. They have even resumed their quarterly dividends. AMC still deserves your attention as the industry leader. There were 75 million visitors to an AMC multiplex during the third quarter. With an impressive slate of upcoming films, the crowds — and the stock’s upticks — should keep coming.
2. IMAX
It’s not just IMAX’s gargantuan screens with enhanced features that are bigger than life these days. IMAX stock has been an eight-bagger since it bottomed out near $6 the week theaters across the country closed in March 2020. The stock is up 40% so far this year.
IMAX is at its best when big movies become blockbusters. This is only the second time in history that more than five movies will exceed $1 billion in worldwide ticket sales in a single year. Revenue should rise 19% to almost $500 million this year. Adjusted earnings should soar 56%.
The cherry on top here is that those targets should move higher after Wednesday’s AMC update. You want a cherry to stack on top of that cherry? IMAX has posted double-digit percentage earnings beats for at least six consecutive quarters.
This will be a hard act to follow for theatrical releases, but movie studios are on it. You will get new Avengers, Frozen, Shrek, Spider-Man, and Star Wars films in 2027. They will fare well on the silver screen. They will do even better for IMAX screenings.
3. EPR Properties
I’ll close with an unlikely pick. EPR is a real estate investment trust (REIT) specializing in experiential properties. It owns the land and buildings for “eat and play” venues, regional amusement parks, and other fun gathering places. Movie theaters represent more than a third — 34%, to be precise — of the annualized base rent it collects. AMC is its largest tenant in the category.
In a year in which many REITs and other income-producing investments have lost ground as interest rates have risen, EPR is beating the market with a 20% return. Investors are getting a healthy 6.1% dividend. It has boosted those payouts four times since reinitiating its distributions in the summer of 2021. It will naturally be susceptible to an economic slowdown, and it suspended its monthly dividend for more than a year after the COVID-19 crisis.
It’s not the safest risk, but if you believe in the future of experiential experiences, EPR is a great way to play with its multiplex-heavy portfolio.
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Rick Munarriz has positions in AMC Entertainment. The Motley Fool has positions in and recommends EPR Properties. The Motley Fool has a disclosure policy.
