NEW YORK (TheStreet) -- Shares of SeaWorld Entertainment (SEAS) were down 5.67% to $11.97 on heavy trading volume early Tuesday afternoon after the Orlando, FL-based theme park operator disclosed late Monday that it will suspend its quarterly dividend indefinitely.
Janney Montgomery Scott analyst Tyler Batory views the decision negatively, saying that it underscores his belief that the company's turnaround will take longer than anticipated, MarketWatch reports.
"While a dividend cut is not a complete surprise, our view is that a portion of the money could be better spent reinvesting in the business and building new attractions," Batory added.
He noted that certain debt covenants limit SeaWorld's spending on capital expenditures, according to MarketWatch.
About 3.66 million shares of SeaWorld have been traded so far today vs. its average trading volume of roughly 1.46 million shares per day.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
SeaWorld's strengths such as its increase in net income, expanding profit margins and growth in earnings per share are countered by weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and weak operating cash flow.
You can view the full analysis from the report here: SEAS
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
