Top Cruise Line Stocks for Q4 2020

Noble Horvath

The cruise line industry is part of the broader travel and tourism industry, focused primarily on providing sea-based vacation experiences. Companies in the industry own and operate cruise ships in various destinations worldwide, offering a variety of itineraries and themed cruises. They also may provide other travel and vacation services. […]

The cruise line industry is part of the broader travel and tourism industry, focused primarily on providing sea-based vacation experiences. Companies in the industry own and operate cruise ships in various destinations worldwide, offering a variety of itineraries and themed cruises. They also may provide other travel and vacation services. Some of the big cruise line companies include Carnival Corp. (CCL) and Norwegian Cruise Line Holdings Ltd. (NCLH). The cruise line industry has been severely negatively affected by the COVID-19 pandemic and related travel restrictions and other social-distancing measures.

Cruise line stocks have dramatically underperformed the broader market over the last year. They have provided total returns well below the Russell 1000’s total return of 15.4% over the past 12 months. This market performance number and the statistics in the tables below are as of September 17.

Below, we look at the top 3 cruise line stocks with the best value, least sales decline, and strongest performance. There are just 4 pure-play cruise line companies easily available to U.S. investors, but we look at them in our usual style. Because the entire industry has suffered losses in the most recent quarter, the value section below will be based on price-to-sales ratio rather than the usual price-to-earnings ratio (P/E Ratio).

Best Value Cruise Line Stocks

These are the cruise line stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, price-to-sales can be substituted as a rough measure of a business’s value. A business with higher sales growth could eventually produce more profit once it achieves, or returns to, profitability. The price-to-sales ratio shows how much you’re paying for the stock for each dollar of sales generated.

Best Value Cruise Line Stocks

 

Price ($) Market Cap ($B) 12-Month Trailing P/S Ratio
Carnival Corp. (CCL) 16.46 14.5 0.7
Norwegian Cruise Line Holdings Ltd. (NCLH) 17.50 4.8 0.8
Royal Caribbean Group (RCL) 69.61 14.9 1.8

Source: YCharts

  • Carnival Corp.: Carnival operates the world’s largest fleet of cruise ships. In addition to 100 vessels, the company also owns travel-related properties such as hotels and vacation destinations throughout the world. Carnival posted a net loss of $2.9 billion in Q3 of its 2020 fiscal year (FY), which ended August 31, 2020. It was a significant change from $1.8 billion in net income it posted in the the same quarter a year ago. The company said that it resumed limited guest cruise operations in early September after having to pause operations in mid-March due to the coronavirus pandemic.
  • Norwegian Cruise Line Holdings Ltd.: Norwegian Cruise Line operates a fleet of passenger cruise ships. The company offers various itineraries and theme cruises. Norwegian reported a net loss of $715.2 million as revenue plunged 99.0% in Q2 2020, which ended June 30, 2020. The company said that the pandemic has had a significant impact on its financial position and has resulted in voyage suspensions. It currently expects to report a net loss in the third quarter as well as for the full fiscal year (FY) ending December 31, 2020.
  • Royal Caribbean Group: Royal Caribbean Group, formerly known as Royal Caribbean Cruises, operates a fleet of vessels in the cruise vacation industry. The company recently announced that it was extending the suspension of sailing for departures from Australia and New Zealand until December 31, 2020. The announcement is in line with the Australian Government’s recent decision to extend the suspension of cruise tourism in the region.

Cruise Line Stocks with the Least Sales Decline

These are the cruise line stocks with the least year-over-year (YOY) sales decline for the most recent quarter. A company’s ability to maintain sales in a difficult business environment can be a sign of good management and/or a strong business model.

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our
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  1. YCharts. “Financial Data.” Accessed Sep. 17, 2020.

  2. Carnival Corp. “Form 8-K dated September 15, 2020,” Page 9. Accessed Sep. 18, 2020.

  3. Carnival Corp. “Form 8-K dated September 15, 2020,” Page 4. Accessed Sep. 18, 2020.

  4. Norwegian Cruise Line Holdings Ltd. “Norwegian Cruise Line Holdings Reports Second Quarter 2020 Financial Results.” Accessed Sep. 19, 2020.

  5. Royal Caribbean Group. “Royal Caribbean Group Suspends Australia and New Zealand sailings.” Accessed Sep. 19, 2020.

  6. Lindblad Expeditions Holdings Inc. “Lindblad Expeditions Holdings, Inc. Reports 2020 Second Quarter Financial Results.” Accessed Sep. 19, 2020.

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