Cineplex Inc. (TSX:CGX), Canada’s largest owner and operator of movie theatres, announced record third-quarter earnings results before the market opened on November 10, and its stock responded by rising 2.5% in the day’s trading session. Let’s take a closer look at the results to determine if this could be the start of a sustained rally higher and if we should be long-term buyers today.

Strong attendance leads to record revenues

Here’s a summary of Cineplex’s third-quarter earnings results compared with what analysts had expected and its results in the same period a year ago.

Metric Q3 2015 Actual Q3 2015 Expected Q3 2014 Actual
Earnings Per Share $0.34 $0.38 $0.25
Revenue $328.25 million $326.63 million $298.99 million

Source: Financial Times

Cineplex’s earnings per share increased 36% and its revenue increased 9.8% compared with the third quarter of fiscal 2014. The company’s double-digit percentage increase in earnings per share can be attributed to its net income increasing 34.7% to $21.44 million, helped by its total operating expenses increasing just 7.7% to $298.35 million, including its film cost increasing just 7.1% to $91.57 million.

Its very strong revenue growth can be attributed to its total attendance increasing 7.6% to 19.41 million, primarily due to “a stronger performing slate of films,” which led to its box office revenues increasing 6.1% to a record $172.57 million and its food service revenues increasing 14.5% to a record $105.46 million.

Here’s a quick breakdown of 10 other notable statistics from the report compared with the year-ago period:

  1. Box office revenues per patron decreased 1.3% to $8.89
  2. Concession revenues per patron increased 6.3% to a record $5.43
  3. Concession margin per patron increased 6.7% to $4.28
  4. Media revenues increased 7.2% to a record $34.3 million
  5. Gaming and other revenues increased 29.1% to a record $15.92 million
  6. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 23% to a record $59.08 million
  7. Adjusted EBITDA margin improved 190 basis points to 18%
  8. Income before income taxes increased 36.3% to $29.9 million
  9. Net cash provided by operating activities increased 58.3% to $36.27 million
  10. Adjusted free cash flow remained relatively unchanged at $35.86 million

What should you do with Cineplex stock today?

It was an outstanding quarter overall for Cineplex, so I think its stock has responded correctly by moving higher. I also think this could the start of a sustained rally to new all-time highs and I think it should be bought by all investors today, because it still trades at inexpensive forward valuations and because it has a high dividend and is a dividend-growth play.

First, Cineplex’s stock trades at 32.7 times fiscal 2015’s estimated earnings per share of $1.57, which is sustainable, but it trades at just 25.4 times fiscal 2016’s estimated earnings per share of $2.02, which is very inexpensive compared with its five-year average price-to-earnings multiple of 30.4 and the industry average multiple of 44.5.

At the very least, I think the company’s stock could trade at a fair multiple of 30, which would place its shares upwards of $60.50 by the conclusion of fiscal 2016, representing upside of more than 17% from today’s levels.

Second, Cineplex pays a monthly dividend of $0.13 per share, or $1.56 per share annually, giving its stock a 3% yield. It is also very important for investors to note that the company has raised its dividend for five consecutive years, and its ample free cash flow generation, including $104.35 million in the first nine months of fiscal 2015, could allow this streak to continue in 2016.

With all of the information provided above in mind, I think Cineplex represents one of the best long-term investment opportunities in the market and the best long-term investment opportunity in the entertainment industry today. All Foolish investors should strongly consider beginning to scale in to positions over the next couple of weeks.

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Fool contributor Joseph Solitro has no position in any stocks mentioned.