It looks like investors continue to wonder whether Cineplex (TSX:CGX) is about to enter a meme-fuelled investment craze. Companies fuelled by these retail investors have seen shares climbed by triple digits in a short time. And Cineplex stock could be one of them. But while this Canadian stock could double this year, it’s also likely to crash.
Thinking about buying Cineplex stock? Hold off for now…
Shares in Cineplex stock are already up 49% this year, but it’s all based on hope. Motley Fool Canada investors seeking quick gains in hopes that this Canadian stock could double may see shares climb, but they will take on massive risk. Right now, those shares stand just as easy a chance to collapse afterward.
Cineplex stock is in massive debt. Even with the country opening up, streaming services continue to be the main supporter of entertainment income in the television and film industry. What’s worse: with most provinces and territories still under restrictions, during this usual blockbuster season, the company will miss out on massive revenue.
I’m not saying Cineplex stock will never return to normal. However, it’s going to take a huge effort. It tried to create income streams through the Rec Room, but that came to a close with the pandemic. It’s created private event options, sports viewing, and ways to reserve seating like its peers. But this may not be enough. It might be time to look at a different stock instead.
This stock has outperformed Cineplex stock by over 800%
Instead of investing in Cineplex stock, how would you like to invest in a company that is a lot more stable with real stock market performance? This Canadian stock could double easily in the next few years. Also, compared to Cineplex stock, shares have climbed by 815% in the last two decades. That’s while Cineplex stock managed only 103% in that same period of time. So, you can gain access instead to 11.7% each year by compound annual growth rate (CAGR) with this other stock!
That’s exactly what you get with Rogers Communications (TSX:RCI.B)(NYSE:RCI). The company is one of the top telecommunications companies in Canada. To date, the stock has market capitalization of $32.65 billion, delivering strong returns over the last few decades. While the stock may have started out delivering phone service, today, it’s a media giant that gives you access to the future of streaming.
This stock is far superior to Cineplex stock in a number of ways. The company’s online applications give you access to all channels on your television, past shows, and recordings. You can also access streaming services through the company as well. The company continues to see subscription revenue climb, even during the recent economic downturn. So, this speaks to the company’s security for income for Motley Fool Canada investors.
A stock for the next 10 years
But it’s not just this present situation that makes Rogers stock better than Cineplex stock. It’s also the future. The company continues to roll out its 5G plan and wireline process. This access to high-speed internet means it will likely see a massive increase in revenue. Once wireline is in place, there is very little upkeep. So, the company simply can just collect subscription revenue. All while increasing prices once it offers 5G. Then there is the potential for deals set up before the pandemic to go through, creating even more revenue.
So, whereas Cineplex stock is only good for Motley Fool Canada investors looking for short-term gains (and very short at that), this Canadian stock could double if you invest now and have patience. Within the next decade, shares could absolutely double from where they are today. And you’ll have dividend income of 3.11% as of writing on top of that — something Cineplex stock no longer offers.
Frankly, when it comes down to a choice between Cineplex stock and Rogers, it’s a clear one for me.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Amy Legate-Wolfe does not own shares of any of the stocks mentioned. The Motley Fool recommends CINEPLEX INC. and ROGERS COMMUNICATIONS INC. CL B NV.