Credit Suisse Initiates Coverage On Cedar Fair, Says 'MLPs Are Fun'

Joel Simkins of Credit Suisse initiated coverage of Cedar Fair, L.P. (NYSE: FUN) on Tuesday with an Outperform rating and $53 price target.

Simkins notes that Cedar Fair is a “total return story” as an MLP with a 6.4 percent yield. As such, shares should appeal to income investors considering the company grew its cash distribution at a 21 percent compounded annual growth rate over the past three years.

“We see room for growth in the distribution through portfolio optimization and leverage to the U.S. economic recovery,” Simkins wrote. “While the downturn presented challenges following integration of the Paramount Portfolio and a brief reduction in the distribution, new management has executed strongly.”

Simkins also states that the company's management has “meaningfully” expanded its margins and improved operations since 2009. The analyst adds that there is still room for growth given an attractive consumer value and no new supply in the regional theme park sector.