FUN Time

Cramer’s been talking a lot about how lower gas prices put more money in the pockets of consumers, and that translates into more cash to spend at the mall. But retailers aren’t the only companies that benefit from consumers’ much-needed relief at the pump. A regional amusement park operator like Cedar Fair does, too.

See, unlike The Walt Disney Co.’s Disneyland or Disney World, the attendance at Cedar Fair’s parks is made up largely of locals. Eighty percent of all visitors live close enough to drive. So this company – and the stock – can at times live and die by the price of gas. And now that the price is headed lower, Cramer’s thinking this stock should outperform.

Even without the help of lower gas costs, though, Cedar Fair seemed to hold its own this summer. July attendance and revenues were up in the single digits. Numbers for August, usually the strongest month, should be just as good, if not better.

Now get this, Cedar Fair pays out a 9.3% dividend yield. How’s that for pro-shareholder? Normally anything that big – barring, say, a shipping stock – would put Cramer on edge. But this company has the earnings to pull it off, he said. The dividend’s equal to $1.92 a share and earnings before EBITDA for 2008 should come in at $6.28. For 2009, $6.47.

The only thing we really need to worry about here is Cedar Fair’s $1.8 billion in debt. But even then it doesn’t look like the company’s in danger of violating its debt covenants. Cedar Fair is forbidden from having a debt load of more than 5.5 times EBITDA, and right now the number’s at 5.1. There would have to be close to a 7% drop in EBITDA to hit that maximum number. According to the company, a drop like that hasn’t happened in 20 years.

Insert your favorite FUN pun here, but the bottom line is that lower gas prices make this a stock to buy again. At least Cramer thinks so.

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