SeaWorld Launches Ambitious Dividend Yield After IPO, Sort Of

While a 2.2% dividend yield might not sound like a very high dividend for those who chase the high dividend yields in riskier sectors, that is still a higher yield than 8 of the 30 Dow Jones Industrial Average components pay right now. IndexArb.com represents that the aggregate S&P 500 dividend yield is 2.26% and that the aggregate DJIA yield is 2.66%. All of a sudden a 2.18% dividend sounds rather ambitious considering that the company is a new IPO. You have to remember that management of public companies often sets their dividend payments up to where it is sustainable in future weak business cycles and to where a dividend can be grown in normal cycles.

Where this dividend will not sound great is when you compare the yield to the 6% or so paid by Cedar Fair L.P. (NYSE: FUN). That dividend was raised in 2013 by more than 50%. Six Flags Entertainment Corp. (NYSE: SIX) yields 4.7%. The common stock dividend is payable on July 1, 2013 to stockholders of record at the close of business on June 20, 2013.

SeaWorld shares closed down 1.1% at $36.61 and its post-IPO trading range is $30.26 to $39.65. The current consensus SeaWorld share price target is $41.13.