Cruising for Cruise Stocks

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.

Cruise Line Shareholders Get Free Onboard Credit

by Fred Fuld III

It’s summer. Time for vacations. Many travelers are going on cruises. Fortunately, there’s a way to get a nice bonus on the cruise, free onboard credit up to $250. The only catch is that you need to be a shareholder of the cruise line, and own at least 100 shares.

For example, Carnival (CCL), which owns Carnival Cruise Lines and Holland America, is one of the companies offering free credit to shareholders of 100 shares or more. Here is what they offer:

  • Onboard credit per stateroom on sailings of 14 days or longer US $250
  • Onboard credit per stateroom on sailings of 7 to 13 days US $100
  • Onboard credit per stateroom on sailings of 6 days or less US $ 50

Carnival, which trades on the New York Stock Exchange,  has a price to earnings ratio of 17.5 and a forward P/E of 14.4, with a price to sales ratio of 2.56. It pays a decent yield of 2.83%.

Norwegian Cruise Line Holdings (NCLH), which trades on NASDAQ, offers shareholders the following:

  • $250 Onboard Credit per Stateroom on Sailings of 15 Days or More.
  • $100 Onboard Credit per Stateroom on Sailings of 7 to 14 Days.
  • $50 Onboard Credit per Stateroom on Sailings of 6 Days or Less.

Norwegian trades at 14.9 times trailing earnings and 11.0 times forward earnings. The price sales ratio is 2.15, and the company does not pay a dividend.

Finally, Royal Caribbean Cruises (RCL), operator of the Royal Caribbean International, Celebrity Cruises, and Azamara Club Cruises, is the second largest cruise line operator after Carnival. It offers onboard credits of:

  • $250 Onboard Credit per Stateroom on Sailings of 14 or more nights.
  • $200 Onboard Credit per Stateroom on Sailings of 10 to 13 nights.
  • $100 Onboard Credit per Stateroom on Sailings of 6 to 9 nights.
  • $50 Onboard Credit per Stateroom on Sailings of 5 nights or less.

RCL has a PE of 14.6, a forward PE of 12.5, and a PS ratio of 2.73. The yield is a favorable 2.15%.

Just keep in mind that just because a cruise line company offers onboard credits, does not mean that the stock is a good investment. Nor should you buy shares in the stock just to get the free credit. However, maybe your ship will come in with one of these stocks.

Disclosure: Author didn’t own any  of the above at the time the article was written.