If you are considering whether to buy Merlin Entertainments shares, Telegraph’s Questor editor has suggested that it may not be worthwhile to do so. In his view, the following are key reasons why investors should potentially steer away from buying shares in the company:
- Its dividend is expected to be up to 1% at most based on its growing revenue. This will not be a high-dividend paying stock.
- It will certainly not be a repeat of Royal Mail due to a very small dividend and ‘less than compelling’ financials.
- Its acquisitions may have been ‘funded’ by a growing debt pile.
- Questor doubt its cash generation abilities due to theme parks being capital intensive through requirements such as refurbishments.
- He believes that the IPO looks like a ‘classic private equity exit’ which could create downward pressure on the shares in the future.
Please note this is just one view from a financial journalist, but it does provide some food for thought as part of an informed decision potentially.
You can discuss your views on this share and any other shares at Investoo Director Investor.