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Best Cruise Stock to Buy Now in 2020 [Stock Analysis of CCL, RCL and NCLH] - YouTube
Channel: Moementum Finance & Stock Investing
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hello everyone and welcome to Moementum
Channel today we are going to review the
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top three cruise companies in the world
and decide which one of them is a better
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stock to buy right now we'll compare the
three major cruise companies including
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Carnival Corporation Norwegian Cruise
Line and Royal Caribbean cruises based
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on a number of financial metrics
including their revenue profitability
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current valuation metrics balance sheet
and their future valuation estimates and
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growth potential at the end I'll share
my pic in terms of which one is a better
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stock - by looking at the stock price
and market capitalisation of these
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companies you would notice that Carnival
Cruises
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has the largest market cap of 15.75
billion followed by Royal Caribbean
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cruises and Norwegian cruise lines over
the past several months cruise companies
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had been hit so hard but most recently
and in fact but in the span of the last
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few weeks they are picking up and these
stocks are getting hot again in fact if
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you look at the last trading session
Carnival Cruise stock has gone up by
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over 15% Royal Caribbean cruises went up
by 8+ % and Norwegian cruise went up by
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close to 20% if you compare the last
trading price for these companies to
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their highest 52-week price would notice
that for Carnival Cruise it has a gross
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potential of 116 percent if it were to
hit its all-time high price again as for
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Royal Caribbean cruise this shows 80%
gross potential and for Norwegian Cruise
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Line it shows a 122 percent growth
potential moving on and looking at their
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revenue for these companies based on the
actual numbers and analyst estimates
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you'd notice that the estimated revenue
for these companies in 2020 and 2021 are
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going to be lower than what you saw back
in 2019 to give you an idea how the
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revenues of these companies have been
hit we've compared their estimate in
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2021 to that of 2019 for instance for
Carnival Cruise you see that they're
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2021 revenue estimate is only 73 percent
of what they had back in 2019 looking at
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the earnings per share both in terms of
actual and estimates you'd notice that
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Carnival Cruise has a better earning
pressure estimate in 2021 though the
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estimated earning per share for all
these three companies is going to
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negative even in 2021 but as we move on
and get into financial year 2022 that's
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where the earning for sure start to
become positive looking at the sales for
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these three companies and their
year-over-year growth Norwegian cruise
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gets the three star here for me look at
the impressive 116 percent past growth
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in terms of sales in 2021 compared to
2020 and similarly 33 plus percent
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growth in 2022 now keep in mind these
numbers are based on analyst estimates
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and may actually shift looking at the
valuation of these companies and in
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particular price to book value trading
12 months Carnival Cruise is showing
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only 0.61 any number under 1 suggests
that the company is priced lower than
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its intrinsic book value not only that
if you look at the enterprise value -
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Arita which is a popular valuation
multiple used in the finance industry to
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measure the value of a company you
notice that Carnival Cruise has a more
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favorable number here which is why
Carnival Cruises gets 3 star here on the
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evaluation metric ask for profitability
if you're looking at a different number
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of metrics here including gross profit
margin net income margin and return on
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assets and when we compare these three
companies Royal Caribbean cruises come
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to top for me because of their very nice
net income margin and return on assets
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one of the concerns of many investors is
the ability of cruise companies to
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navigate through these difficult time as
we know during this pandemic
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the revenue of these companies have been
hit so hard which is why it's important
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for the companies to be able to have
enough liquidity and service their
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liabilities looking at their current
assets for the companies and comparing
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it to current liabilities Sally all
these cruise companies they have a
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higher current liability versus their
current assets the one that is a bigger
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red flag for me is Carnival Corporation
given that they have almost three times
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more in current liabilities than their
current assets that's said when we
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compared their total assets to their
total liabilities all these companies
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are in the green as their total assets
loss surpass their total liabilities
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well this balance sheet may be a little
bit alarming knowing that these cruise
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companies are already look
to some financing options and with the
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improvement to the economy and
potentially more consumer discretionary
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spending they could possibly sail
through these difficult times lastly I'd
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like to take a look at the dividend
payments for these companies many of our
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viewers on momentum Channel our dividend
stock investors so I believe this
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information would be very much of
interest to you
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here for Carnival Cruise they pay a
dividend yield of 9.30 percent a forward
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with a yield of 9 points 30 percent
their payout ratio is currently sitting
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at seventy three point forty four
percent it's a little bit higher than
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what I like to see typically I'd like to
see a payout ratio under sixty percent
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but we know how the stock price for
Carnival Cruises has been drastically
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impacted which is why it's pushing their
payout ratio higher assuming that they
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are maintaining the same level of
dividends paid as for Royal Caribbean
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cruises they pay a forward dividend
yield of four point forty nine percent
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at this time and they have a very high
payout ratio of 353.50 nine percent this
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is definitely not a good sign because
just shows that they are for the most
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part actually using older net income to
have to pay for their dividends this
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could be a big red flag and there is a
chance that Royal Caribbean cruise might
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actually cut its dividend that's it
they've actually been growing their
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dividend over the past seven years
straight and their five-year growth rate
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in terms of cumulative growth in their
dividend has been twenty-one point
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eighty nine percent compared to fourteen
point eighty seven percent for Carnival
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Cruises
keep in mind that Norwegian Cruise Line
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does not currently pay any dividend
there you have it folks an in-depth
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review of the stocks for the three major
cruise companies the contents of this
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video has been put together based on my
research that said I'm not a financial
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advisor and you should always do your
own due diligence before you buy any
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securities or stock personally I own
shares of Carnival Cruise and Royal
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Caribbean cruise and have had very good
returns on them I do not own any shares
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of Norwegian cruise lines if I were to
pick any of these stocks to invest in I
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would probably lean towards Carnival
Cruise and Royal Caribbean cruises the
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game both of them pay a very decent
dividend at this time and they have very
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good potential over the span of the next
two to three years are you invested in
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any of these cruise companies if yes
what has we used
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okay if not would you consider buying
into any of these stocks let me know in
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the comment section down below hope you
enjoyed this video if you did please hit
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