Cruise Line Stock Perks and Shareholder Benefits
Table Of Content
Travelers with Lindblad can book exciting expeditions all over the world, including to Antarctica, the Caribbean coast, and Patagonia. Because of the types of trips offered, Lindblad has built a loyal base of wealthy customers. Norwegian offers a variety of cabin categories, which enables it to accommodate every type of traveler. It was the first cruise line to offer studios exclusively for solo travelers, and it has lodging fit for everyone from people sailing on their own to large families. Norwegian Cruise Line Holdings (NCLH 1.37%) is a hit among casual cruisers and is known for its laid-back atmosphere. Norwegian offers what it calls "freestyle cruising," meaning its cruises have no dress codes, no set dining times, and no assigned seating.
Carnival
The State Department urged citizens not to take cruises in Asia and any sort of travel may come to a screeching halt across the continent. While these stocks remain cyclical, industry consolidation has created a few winning companies. The cruise line has implemented some of the strictest measures to avoid COVID-19 outbreaks as its cruises resume service. It has a 100% vaccination policy that it extended indefinitely in November 2021.
Join Over Half a Million Premium Members Receiving…
No benefit is given for sailing with Silversea, Pullmantur, TUI or Croisieres de France -- lines for which Royal Caribbean, Ltd. holds partial ownership. Since shareholders receive the same benefits regardless of which Carnival stock they own, we're lumping them together going forward. Just last week, Norwegian Cruise Line said it had cancelled 40 voyages in Asia and that the coronavirus would take $0.75 from expected earnings per share in 2020, which were expected to be $5.40 to $5.60 per share.
Will NCLH stock price grow / rise / go
But they've also had to take on significant debt to get through the pandemic, and revenues aren't predicted to get back to pre-COVID numbers until 2024. Ultimately, only you can decide what is best for your personal financial situation; Cruise Critic can neither support nor advise against your decision to purchase stocks. We strongly advise doing your own research and seeking out the counsel of a financial adviser before making any stock purchase. Royal Caribbean stockholders only receive the benefit when sailing with Royal Caribbean, Celebrity and Azamara -- the company's wholly owned brands.
Most banks and online brokerages charge a small fee for each stock trade or purchase. One of the hardest-hit industries in the wake of the COVID-19 outbreak is undeniably the cruise lines. The three major publicly traded players -- Carnival Cruise Line, Royal Caribbean International, and Norwegian Cruise Line -- have been slammed in recent weeks, shedding as much as two-thirds of their peak values.
State Department and the Centers for Disease Control (CDC) issued advisories over the weekend suggesting Americans avoid boarding cruises, given the heightened risk of contracting COVID-19 on the ships. On the surface, the discount in Norwegian Cruise Line shares today seems like a good buying opportunity. Shares trade at 7.8 times 2020 earnings estimates and that's a great multiple for most consumer discretionary stocks. But this is also an industry where customers could stay away a lot longer than they will at other businesses because of the nature of cruises.
Good Investment?
According to Lindblad, a majority of guests opted for future travel credits over a refund for voyages that were cancelled or rescheduled due to the pandemic. The travel company has seen significant increases in its booking numbers, even compared to pre-pandemic times. In its third quarter 2021 financial results, it reported that 2022 bookings were 51% ahead of bookings for 2021 and 27% ahead of bookings for 2020. It was also one of the first to offer cruises in the price range of the average traveler. Although affordable cruises are more common now, the market was previously dominated by luxury voyages. Also know that the benefit is limited to one credit per cabin per 100 shares on each sailing and is nontransferable.
Norwegian Cruise Line Holdings Ltd. stock outperforms competitors on strong trading day - MarketWatch
Norwegian Cruise Line Holdings Ltd. stock outperforms competitors on strong trading day.
Posted: Wed, 17 Apr 2024 21:23:00 GMT [source]
Royal Caribbean Cruises
Carnival's sheer size creates operating and pricing advantages in good and bad times. It also only helps that Carnival packs the highest yield of the three out-of-favor cruise stocks. Lindblad Expeditions (LIND 0.42%) isn't your typical cruise company, and that could make it a safer play than most cruise line stocks. While others carry thousands of passengers per ship, Lindblad specializes in smaller, more expensive adventure cruises. The maximum capacity for these cruises is typically between 48 and 148 passengers, depending on the trip. That being said, cruise line stocks are still a long-term play that could have some rough seas ahead.
As cruise stocks recover, two traders agree this is the group's best bet
Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. "If you look at Norwegian versus its peers, it's in the best technical shape. Currently, it's only down 10% from its recent highs versus its peers, which are down closer to 15%," he said. "So, we've lost less and we're actually starting to climb back faster. So, I think if we are ready to dip our toe into the water, Norwegian is the cruise liner to buy here."
But cruise ship stocks caught a bid Wednesday as the broader market continued its seemingly unshakable trek to new highs. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. The main competitive advantage that Lindblad enjoys is its ability to offer premium, one-of-a-kind experiences.
Cruise ships require a buoyant economy with happy consumers excited about hitting the open waters, and that's not the course that's being charted today. Even if the world sidesteps a global recession at the other end of these viral headwinds, it's going to take the cruise industry a bit longer to recover than other travel markets. However, with the stocks at multi-year lows, patient and risk-tolerant investors may find these companies to be a lot more tempting as stocks than near-term getaway considerations. Seasoned cruise travelers know when to book future sailings to get the best rates, and investors now have that same opportunity to get in on three quality players at historically low prices. If you invest $4,000 and typically take four cruises per year, each one with $100 in onboard credit (i.e., free spending money), your investment "earns" $400 or 10 percent per year. In most cases, the investor OBC is superseded by other special offer credits, so no stacking.
Investors in search of safe stocks may want to stay away from this industry right now. All three companies are now trading for roughly five times forward earnings, but those profit targets continue to drift lower as Wall Street catches up to the financial hits that are coming. The chunky payouts at Carnival and Royal Caribbean are nice -- NCL has never paid distributions since its 2013 IPO -- but naturally they are susceptible to the industry's financial health. Carnival and Royal Caribbean did suspend their dividends during the 2008 global subprime crisis, and this could potentially play out even worse for the industry in the near term. It's not a surprise to see the largest cruise line hold up the best, even though Carnival is the parent company behind the maligned Diamond Princess and Grand Princess vessels that remain quarantined with passengers.
So, if your booking came with an onboard credit of $75 and your cruise line stock benefit is $100, you might still be able to get the difference of $25 applied to your cabin. Buying the stocks requires a brokerage account, but online brokerage sites like E-Trade, Fidelity and TD Ameritrade are options if you don't already have a stockbroker. Some banks, like Capital One and Wells Fargo, also offer investment services from their own online portals.
If you want to invest in cruise line stocks, you have several attractive options. Disney stock is publicly traded, but the company discontinued all investor benefits in 2000. There are horror stories of folks quarantined on ships with hundreds of confirmed coronavirus cases, including a handful of casualties. And just when you thought the news couldn't get any worse for the reeling industry, the U.S.
Revenue for each of the three largest cruise lines declined by between 73% and 80% in 2020. Although the cruise industry's annual revenue almost doubled in 2021 (from $3.36 billion to $6.65 billion), it's still far from the $27.5 billion reported in 2019. Cruise stocks have typically traded at a discount to the market, but now the markdowns are at the point where they're just flat-out ridiculous after Monday's latest swoon. These are turbulent times, and it's easy to see why the waters are rough for the industry.
It's hard to fill cabins when folks are worried about how quickly a disease can spread in that kind of contained environment. However, it's not as if the cruise industry hasn't experienced reputational setbacks before. This is the industry that has overcome several norovirus outbreaks as well as the Achille Lauro hijacking, Costa Concordia sinking, and even the infamous poop cruise. The technical analyst added that, historically, cruise stocks' performance in response to negative news like this tends to lead to "a buyable dip." The group has been struggling amid growing fears around the spread of the coronavirus — with Carnival Corp., Royal Caribbean and Norwegian Cruise Line Holdings down more than 13%, 12% and 7% respectively year to date.
Comments
Post a Comment