If I were to compare the stocks of IMAX (NYSE: IMAX) and AMC Entertainment Holdings (NYSE: AMC), it's basically a monster movie right now. If you buy shares of IMAX, you're betting on King Kong. And if you buy shares of AMC Entertainment? You're betting on Tokyo. You're probably saying to yourself, "Oh man, that's pretty lopsided. What about Godzilla? Where is Godzilla in this weird movie metaphor?" Godzilla is the mountain of debt AMC owes to the banks. Let me explain the plot here and offer up a spoiler or two. AMC might recover ... after it is destroyed I hate investing in companies with huge debt loads. AMC Entertainment owed over $10 billion in debt before the pandemic. It's added another $1.5 billion in debt over the last year. And the interest rates it agreed to pay on that debt have created a situation similar to someone trapped with some horrible credit card plan, where all the debt has payback rates over 10%. The bankers are expecting $1.8 billion in cash due in 2024. And $7.2 billion is due in 2026. Image source: Getty Images. In order to make payments on its massive debt load, AMC needs to make money. The company lost $4.6 billion last year. Of course, not every year is going to have a virus shut down the world economy. But AMC lost money in 2019, too. AMC's market cap is $5 billion. It used to be $500 million. I'm not predicting that we will see $4.5 billion worth of destruction. But Tokyo doesn't have to be 90% destroyed for it to be an awful investment. How can I put this any more simply? Do not buy shares of AMC Entertainment. If you know Godzilla is out there, why do you think you will avoid destruction? You won't. And adding debt is just delaying the inevitable. It's like Tokyo is showering Godzilla with radiation, making him bigger and uglier and meaner. Why King Kong will always win Fictional movie scientists agree: King Kong is way smarter than Godzilla. So how is IMAX going to outsmart that giant pile of debt that's getting bigger all the time? By having an asset-light business model that keeps the debt tiny. IMAX has more cash than debt. Yes, that's right, the Godzilla that IMAX is facing in this mixed-up movie metaphor has been shrunk into nothingness. You look at those numbers, with AMC owing $11 billion to the banks, while IMAX is sitting on $11 million in net cash, and you wonder how these two companies are in the same industry. IMAX has a revolutionary technology that it licenses out to exhibitors, including AMC. In the movie theater industry, IMAX is in the sweet spot. It's the technology that everybody wants, one that allows exhibitors to charge more money to audiences, who are willing to pay up for an even more awesome experience. IMAX doesn't have to build out theaters. Other people build the theaters (and take on the debt). IMAX licenses out the intellectual property and provides the technology that allows the massive screens to show the films. It's the nature of the business model that makes IMAX a superior investment to AMC. IMAX will have higher profit margins and produce superior cash flows while avoiding the debt monster altogether. IMAX data by YCharts Will IMAX win the battle and lose the war? It's sobering to look at a five-year stock chart of IMAX and AMC. Both companies have badly trailed the S&P 500. AMC stock has done much worse, of course, dropping 63%. This is even after the huge run-up in the share price in 2021. AMC shareholders were obliterated before the recent uprising. IMAX owners were hit hard, too. That's why the one-year chart looks so different. IMAX data by YCharts Both of these stocks were trampled in the lockdown, as their revenues disappeared. As we reach the tail end of the COVID-19 epidemic (knock on wood), the stocks have surged higher as value investors have bought into the view that happiness will return this year. That's why the share price of IMAX has doubled over the last year, and AMC stock price has tripled. It would be a mistake to assume that AMC stock will continue to surge higher, or that it will outperform IMAX from these levels. Obviously, the two businesses will be a lot better off in 2021 than last year. The comps will be terrific. But IMAX investors will be a lot better off. That's because the underlying business is a lot stronger. AMC is in a precarious financial situation. The stock has risen so fast in 2021 because of a massive short squeeze. These trading shenanigans offer no security to investors. So while the industry will recover nicely this year, sometimes stock performance is divorced from fundamentals. That's the situation with AMC stock right now. Eventually, stock prices coincide with how the business is doing. AMC is an awful, high-debt business in an industry that will rocket off the bottom this year. IMAX is a beautiful, low-debt business in an industry that will rocket off the bottom this year. If you want to invest in theater chains, IMAX is the only ticket to buy. 10 stocks we like better than AMC Entertainment HoldingsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and AMC Entertainment Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of February 24, 2021 Taylor Carmichael owns shares of IMAX. The Motley Fool has no position in any of the stocks mentioned. 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