Cruising for Cruise Stocks

cruise ship

by Fred Fuld III

January through March is generally the busiest time of the year for reservations on cruise lines, since it is the best time of year for vacationers to plan their spring and summer cruise vacations. And if you are a shareholder, you can get lots of complementary onboard credits.

There are just a few opportunities to climb on board with cruise stocks. Hopefully they won’t sink or experience choppiness, but will be smooth sailing for investors. Here they are:

Carnival Corp. (CCL)

Carnival is one of the largest cruise and vacation companies in the world. Their cruise lines which operate out of North America, the United Kingdom, Germany and Italy, include Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn Cruise Line and Windstar Cruises in North America; AIDA in Germany; Costa Cruises in southern Europe; P&O Cruises, Cunard Line, Ocean Village and Swan Hellenic in the United Kingdom; and P&O Cruises in Australia. They are headquartered in Miami, Florida and London, England. The stock trades at 12.9 times trailing earnings and 11.5 times forward earnings. It pays a decent yield of 3.55%.

Carnival plc (CUK)

This is the ADR for the Carnival stock which trades on the London Exchange. An explanation is necessary. Carnival Corporation & Carnival plc operates under a dual listed company structure in which Carnival Corporation and Carnival plc operate as a single economic entity through contractual agreements between each of their own separate legal entities. Shareholders of both Carnival Corporation and Carnival plc have the same voting participation and economic interest but their shares are listed on different stock exchanges and are not fungible. [Is this as clear as dirty water?]

Carnival Corporation common stock is traded on the New York Stock Exchange under the symbol CCL. Carnival plc is traded on the London Stock Exchange under the symbol CCL and as an ADS on the New York Stock Exchange under the symbol CUK.

Carnival is the only company in the world to be included in both the S& P 500 index in the US and the FTSE 100 index in the UK. If you look at the graphs for the Corp. and the plc stocks, they match almost perfectly

Royal Caribbean Cruises Ltd. (RCL)

This company owns Royal Caribbean International and Celebrity Cruises. It also owns Pullmantur S.A., which has ships in Europe and Latin America. The company also offers land tour vacations in Alaska, Canada and Europe. It is headquartered in Miami, Florida. The stock has a trailing P/E 13.4 and a forward P/E or 11.3. It has a yield of 2.5%.

Norwegian Cruise Line (NCLH)

This company operates the Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands. The stock trades at 12.2 times trailing earnings and 9.5 times forward earnings.

Author did not own any of the above at the time the article was written.