This steady business should pay out nearly 6% this year to its investors.
Most investors love dividend shares. They pay a steady stream of income and tend to be low maintenance compared to most other companies. What's more, right now you can get a much higher level of income than you can from an ordinary savings account.
Traditionally, you'll find such shares in the FTSE 100 (UKX), but it's worth looking further down the market as well. One possibility is Cineworld (LSE: CINE), whose cinemas take around a quarter of all UK box office receipts.
I like this business because it's very simple to understand. Basically, you're running a load of sheds, full of semi-comfortable seats, that are fiercely air conditioned. Okay, you do need invest in the latest technology -- 3D, Digital and the like -- but it should relatively easy for any experienced management team to keep on top of this.
While Cineworld has to take the films that are offered, the big film studios do a lot of your marketing for you. And box office receipts don't tend to be that volatile from year to year, allowing you to turn a fair chunk of the money you get into those lovely dividends. It's also very easy to keep track of how UK receipts are progressing throughout the year, via sites like imdb and boxofficemojo.
The digital revolution doesn't seem to have affected the world of cinema just yet. Although we're viewing more films through the services of BSkyB (LSE: BSY) and BT (LSE: BT-A), we're still enjoying the cheap evenings out that the movies offer. And many cinemas are also branching out with screenings of special events, junior film clubs and so on, filling out the quieter periods of the year.
In many ways, this business reminds me of the undertaker Dignity (LSE: DTY). Demand for its services is pretty steady from year to year, and it doesn't need to do much to attract custom other than to be in the right place. Like Dignity, it's also the only business of its type on the UK market, which can sometimes work to our advantage as investors, as such firms can slip under the radar.
Cineworld isn't resting on its laurels, though. It's introduced some new features into my local cinema recently. No longer do you have to queue for ages, as you can buy tickets at the counters that serve ice cream, popcorn and those smelly nachos. Even better, there is now a 10% discount for booking online, whereas before you had to pay a booking fee.
Offering this discount looks like it has produced a small hit in revenues, as seen from its latest trading update. But I'd agree with the company when it says that it should help develop customer relationships over the long term.
I'm sure they're already building up a database of what films we're going to, so that they can tweak future marketing campaigns. It's their very own version of Tesco's (LSE: TSCO) Clubcard. I can save them a little time here, as I'm pretty keen on The Dark Knight Rises and The Hobbit, but I'm already thinking of excuses to get me out of seeing the latest Twilight sequel.
Anyway, what of the dividend? 11p per share was paid last year and 12p is forecast for this one. On the current share price of 208p, that's a historic yield of 5.3% and a prospective yield of 5.8%. If the dividend does indeed rise to 12p, that will represent a 5% annual increase since the company floated back in 2007.
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> The Motley Fool owns shares in Tesco.
