Royal Caribbean Cruises (RCL) vs Carnival Corporation (CCL). Who comes out on top?
Category: Royal Caribbean Cruises (RCL) and Carnival Corporation (CCL)
Date: 23 June 2020 Stock price of Royal Caribbean: $52.37 Stock price of Carnival Corporation: $17.30 Royal Caribbean Cruises (RCL) vs Carnival Corporation. We are sure many punters, investors, traders are wondering which on to go for and which one will provide the best returns going forward following the Covid-19 pandemic? And whose stock has held up better during this difficult time for cruise ship companies? We take a look.
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The temptation would be to go for the stock that declined the most and has the potential to climb back up the most. And one can argue that that pick is also the biggest cruise ship company in the world. But the question is why did the stock of Carnival Corporation decline more than that of Royal Caribbean Cruise"
More about Carnival Corporation (CCL)
Carnival Corporation & plc is the world’s largest leisure travel company and among the most profitable and financially strong in the cruise and vacation industries, with a portfolio of nine of the world’s leading cruise lines. We are also the largest cruise company, carrying nearly 45 percent of global cruise guests, and a leading provider of vacations to all major cruise destinations throughout the world. With operations in North America, Australia, Europe and Asia, our portfolio features Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, P&O Cruises (Australia), Costa Cruises, AIDA Cruises, P&O Cruises (UK) and Cunard. Our portfolio of leading global, regional and national cruise brands that sell tailored cruise products, services and vacation experiences to the world’s most desirable destinations.
Together, the corporation’s cruise lines operate 104 ships with 249,000 lower berths visiting over 700 ports around the world, with 17 new ships scheduled to be delivered through 2025. Carnival Corporation & plc also operates Holland America Princess Alaska Tours, the leading tour company in Alaska and the Canadian Yukon. Traded on both the New York and London Stock Exchanges, Carnival Corporation & plc is the only group in the world to be included in both the S&P 500 and the FTSE 100 indices. At Carnival Corporation & plc, our highest responsibilities and our top priorities are to operate safely, to protect the environment, and to be in compliance everywhere we operate in the world. On this foundation, we aspire to deliver unmatched joyful vacations for our guests, always exceeding their expectations and in doing so driving outstanding shareholder value. We are committed to a positive and just corporate culture, based on inclusion and the power of diversity. We operate with integrity, trust and respect for each other — seeking collaboration, candor, openness and transparency at all times. And we intend to be an exemplary corporate citizen leaving the people and the places we touch even better.
Quick facts about Carnival Corporation (CCL)
Together, the corporation’s cruise lines operate 104 ships with 249,000 lower berths visiting over 700 ports around the world, with 17 new ships scheduled to be delivered through 2025. Carnival Corporation & plc also operates Holland America Princess Alaska Tours, the leading tour company in Alaska and the Canadian Yukon. Traded on both the New York and London Stock Exchanges, Carnival Corporation & plc is the only group in the world to be included in both the S&P 500 and the FTSE 100 indices. At Carnival Corporation & plc, our highest responsibilities and our top priorities are to operate safely, to protect the environment, and to be in compliance everywhere we operate in the world. On this foundation, we aspire to deliver unmatched joyful vacations for our guests, always exceeding their expectations and in doing so driving outstanding shareholder value. We are committed to a positive and just corporate culture, based on inclusion and the power of diversity. We operate with integrity, trust and respect for each other — seeking collaboration, candor, openness and transparency at all times. And we intend to be an exemplary corporate citizen leaving the people and the places we touch even better.
Quick facts about Carnival Corporation (CCL)
- Carnival Corporation is listed on the New York Stock Exchange under share code ticker: CCL
- Number of employees: 150 000
- Passengers Carried (in thousands) :12,900
- Passenger Capacity :249,000 lower births
- Number of Ships: 104
- Revenues in 2019: $20.825 billion
- Earnings per share in 2019: $4.32
- Shares in issue: 692 million
- Dividends paid per share in 2019: $2.00
- Stockholders equity in Carnival Corporation: $25.365 billion
- Stockholders equity per share: $36.65
- Price/Stockholders equity:0.474
More About Royal Caribbean Cruises (RCL)
We are the world's second largest cruise company. We control and operate four global cruise brands: Royal Caribbean International, Celebrity Cruises, Azamara and Silversea Cruises (collectively, our "Global Brands"). We also own a 50% joint venture interest in the German brand TUI Cruises and a 49% interest in the Spanish brand Pullmantur (collectively, our "Partner Brands").
Together, our Global Brands and our Partner Brands operate a combined total of 61 ships in the cruise vacation industry with an aggregate capacity of approximately 141,570 berths as of December 31, 2019. Our ships operate on a selection of worldwide itineraries that call on more than 1,000 destinations on all seven continents. In addition to our headquarters in Miami, Florida, we have offices and a network of international representatives around the world, which primarily focus on sales and market development. We compete principally by operating valued brands that offer exceptional service provided by our crew and on the basis of innovation and quality of ships, variety of itineraries, choice of destinations and price.
We believe that our commitment to build state-of-the-art ships and to invest in the maintenance and upgrade of our fleet to, among other things, incorporate many of our latest signature innovations, allows us to continue to attract new and loyal repeat guests. We believe cruising continues to be a popular vacation choice due to its inherent value, extensive itineraries and variety of shipboard and shoreside activities. In addition, we believe our brands are well-positioned globally and possess the ability to attract a wide range of guests by appealing to multiple customer bases allowing our global sourcing to be well diversified. Royal Caribbean was founded in 1968 as a partnership. Its corporate structure has evolved over the years and, the current parent corporation, Royal Caribbean Cruises Ltd., was incorporated on July 23, 1985 in the Republic of Liberia under the Business Corporation Act of Liberia.
Quick facts about Royal Caribbean Cruises:
Together, our Global Brands and our Partner Brands operate a combined total of 61 ships in the cruise vacation industry with an aggregate capacity of approximately 141,570 berths as of December 31, 2019. Our ships operate on a selection of worldwide itineraries that call on more than 1,000 destinations on all seven continents. In addition to our headquarters in Miami, Florida, we have offices and a network of international representatives around the world, which primarily focus on sales and market development. We compete principally by operating valued brands that offer exceptional service provided by our crew and on the basis of innovation and quality of ships, variety of itineraries, choice of destinations and price.
We believe that our commitment to build state-of-the-art ships and to invest in the maintenance and upgrade of our fleet to, among other things, incorporate many of our latest signature innovations, allows us to continue to attract new and loyal repeat guests. We believe cruising continues to be a popular vacation choice due to its inherent value, extensive itineraries and variety of shipboard and shoreside activities. In addition, we believe our brands are well-positioned globally and possess the ability to attract a wide range of guests by appealing to multiple customer bases allowing our global sourcing to be well diversified. Royal Caribbean was founded in 1968 as a partnership. Its corporate structure has evolved over the years and, the current parent corporation, Royal Caribbean Cruises Ltd., was incorporated on July 23, 1985 in the Republic of Liberia under the Business Corporation Act of Liberia.
Quick facts about Royal Caribbean Cruises:
- Royal Caribbean Cruises is listed on the New York Stock Exchange under share code ticker: RCL
- Together, our Global Brands and our Partner Brands operate a combined total of 61 ship
- Royal Caribbean Cruises had the capacity of approximately 141,570 berths (per year) as of December 31, 2019
- Passengers Carried: 6,553,865
- Passenger Cruise Days: 44,803,953
- Revenues in 2019: $10.95 billion
- Earnings per Royal Caribbean Cruises share in 2019: $8.95
- Dividends per Royal Caribbean Cruises share: $2.96
- Stockholders equity in Royal Caribbean Cruises: $10.231 billion
- Stockholders equity per share: $48.92
- Price/Stockholders equity: 1.07
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Carnival Corporation (CCL) stock price vs Royal Caribbean Cruises (RCL) stock price
The image below shows the stock price performance of Carnival Corporation (CCL) and Royal Caribbean Cruises (RCL) over the last 3 years. And as one can see the returns of both cruise ship companies have been overwhelmingly negative over the last 3 years. And the bulk of their declines recorded over the last 3 years has taken place since the start of 2020. And this is due to the significant impact the coronavirus has had on the global travel and tourism industry and these two firms business in particular. Over the last 3 years the stock of Carnival Corporation (CCL) has declined by -73.56% while the stock of Royal Caribbean Cruises (RCL) declined by -52.23% over the same time period.
So which one should one pick? The temptation would be to go for the stock that declined the most and has the potential to climb back up the most. And one can argue that that pick is also the biggest cruise ship company in the world. But the question is why did the stock of Carnival Corporation decline more than that of Royal Caribbean Cruises. Is there an underlying reason as to why RCL performed better than CCL during this time. Do they have a stronger balance sheet, or a lower cash burn rate than Carnival Corporation.
At the current price we do believe that the stock of Carnival offers the better buy, as its trading at a lower Price/stockholders equity per share ratio, has the biggest market share in a market where barriers to entry is high and since their stock has declined far more in percentage terms than that of Royal Caribbean for example we do believe it offers more long term upside in coming weeks and months.
Thus in the battle between Carnival Corporation (CCL) and Royal Caribbean Cruises (RCL) we pick Carnival Corporation as our winner
At the current price we do believe that the stock of Carnival offers the better buy, as its trading at a lower Price/stockholders equity per share ratio, has the biggest market share in a market where barriers to entry is high and since their stock has declined far more in percentage terms than that of Royal Caribbean for example we do believe it offers more long term upside in coming weeks and months.
Thus in the battle between Carnival Corporation (CCL) and Royal Caribbean Cruises (RCL) we pick Carnival Corporation as our winner