7 Best Cruise Stocks to Buy Now

It's been smooth sailing for cruise stocks so far this year, thanks to tailwinds from strong travel demand.

Cruise ship at sea aerial view with dramatic clouds at sunset in the Andaman Sea, Phuket, Thailand

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Cruise stock investors stand to benefit immensely if shares return to their pre-pandemic levels.

Many cruise stocks have rewarded investors year to date thanks to booming travel demand. After gloomy performances during the pandemic, cruise stocks look poised to deliver gains for investors.

Battered comps from slow travel make it easier for cruise stocks to achieve triple-digit year-over-year revenue growth. And some cruise companies have already reported that type of growth.

Do Cruise Stocks Present an Opportunity?

Many cruise stocks still have not reached their pre-pandemic prices. Carnival Corp. & PLC (ticker: CCL ), one of the best cruise stocks to buy now, is well removed from its pre-pandemic per-share range of high $40s to low $50s.

John Engle, president of Almington Capital, indicates that cruise stocks can continue to ride the momentum from current trends. "In the short term, cruise stocks may enjoy some tailwinds thanks to upbeat expectations about the summer vacation season," Engle says. "After years of struggles in the face of a global pandemic and macroeconomic uncertainty, cruise operators have been bouncing back."

Cruise stock investors stand to benefit immensely if shares return to their pre-pandemic levels. Some of these cruise stocks distributed quarterly dividend payments leading up to 2020, hiking the dividend each year.

Meanwhile, the airline industry has experienced a strong recovery as well. Delta Air Lines Inc. ( DAL ) raised its full-year outlook and reinstated its dividend. American Airlines Group Inc. ( AAL ) has also flipped back to profitability and is experiencing strong top-line growth.

The success of airlines and cruises demonstrates that more people want to travel with restrictions lifted.

Cruise Stock Risks to Keep in Mind

Although cruise stocks have delivered strong year-to-date returns and have made significant progress, the travel sector carries some risk. Some stocks are riskier than others, but Engle says some risks specifically apply to cruise stocks.

"The biggest risk for cruise stocks is sustainable profitability," says Engle. "Many cruise operators are carrying an awful lot of debt, and it is not clear whether they will be able to service it over the long run. Thin profit margins and high debt should always be a cause for concern for investors looking at cyclical industries . Even a mild recession could be enough to devastate cruise operators' bottom lines."

Cruise stocks can continue their run as long as travel demand stays strong. However, any slowdowns can hurt cruise companies that carry significant debt. Cruise stock investors should carefully monitor travel demand to gauge the risk of their investments.

Investors seeking exposure to heightened travel demand may want to consider these seven top cruise stocks:

Carnival Corp. & PLC ( CCL )

Carnival shares have more than doubled year to date as more travelers return to cruises. The company reported $4.9 billion in revenue in the second quarter, more than doubling its growth year over year. It is also the highest quarterly revenue number the corporation has ever reported. Total customer deposits also reached an all-time high of $7.2 billion, eclipsing the previous record of $6 billion in May 2019.

Carnival also reported a better-than-expected net loss of $407 million. Previous guidance suggested a second-quarter net loss between $425 million and $525 million. In a press release, Carnival CEO Josh Weinstein expressed confidence in the company's ability to continue its progress.

"With bookings and customer deposits hitting all-time highs, we are clearly gaining momentum on an upward trajectory."

Royal Caribbean Cruises Ltd. ( RCL )

Royal Caribbean shares have also doubled year to date, and the company is almost back to profitability. The company reported $2.9 billion in revenue and a $47.9 million net loss (19 cents per share) in the first quarter. Full-year guidance calls for adjusted earnings per share in the range of $4.40 to $4.80 per share.

A return to profitability can mean a dividend isn't too far away. While management said there is no plan to declare or pay dividends in the near future, a return to payouts in 2024 or 2025 would be a welcome development for investors.

Prior to the pandemic, Royal Caribbean had been a reliable dividend growth stock since 2011. During that time span, the annual dividend jumped from $0.40 per share to $3.12 per share.

Royal Caribbean CEO Jason Liberty remains optimistic that the rising trend of cruises will hold its ground.

"Leisure travel continues to strengthen as consumer spend further shifts toward experiences," Liberty said in a May 4 press release. "Demand for our brands is outpacing broader travel due to a strong rebound and an attractive value proposition."

Raised guidance also indicates the confidence leadership has in the underlying business.

Norwegian Cruise Line Holdings Ltd. ( NCLH )

NCLH stock hasn't doubled like the other cruise stocks, but it has still outperformed the market with a nearly 70% year-to-date gain. The company reported $1.8 billion in revenue for the quarter ended March 31, which represents 249% year-over-year growth. Its annual revenue as of March 31 was $6.1 billion, a 426.5% increase year over year. Norwegian had a quarterly net loss of $159.3 million, or 38 cents per share.

Norwegian met or exceeded guidance on all key metrics in the first quarter. The company believes it can achieve a full-year adjusted EPS of 75 cents, an increase from its prior estimate of 70 cents. The company is going through a CEO transition, with Frank Del Rio passing the helm to Harry Sommer at the end of June. In his last press release as CEO, Del Rio informed shareholders that the company is "solidly positioned for 2023 and beyond" and has completed its post-pandemic operational recovery.

Lindblad Expeditions Holdings Inc. ( LIND )

Lindblad Expeditions is a smaller cruise stock, with a $558 million market cap that has rewarded shareholders with a 35.6% year-to-date return as of July 17. The company reported $143.4 million in revenue in the first quarter, representing a 167% revenue increase from Q1 2019 and a 111% revenue increase from Q1 2022.

The company has growing occupancy rates and reported a quarterly net income of $621,000. That is a significant improvement from last year's net loss of $41.7 million in Q1 2022.

Leadership remains confident in the booming demand for cruise travel, setting full-year tour revenue guidance at $550 million to $575 million and adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA , at $70 million to $80 million. The company has also planned a $35 million stock repurchase program.

Agilysys Inc. ( AGYS )

Agilysys provides software for the hospitality industry, giving it some exposure to cruise lines. The company also serves other sectors, such as hotels, resorts, stadiums and higher education.

Agilysys reported 21.8% year-over-year revenue growth to a record $198 million in fiscal year 2023, which ended on March 31. The company also reported $14.6 million in net income, more than doubling its growth from FY 2022. A healthy 60% of the company's total revenue is recurring, which makes it more feasible for the company to maintain profit margins.

Agilysys hasn't soared like pure-play cruise stocks. In fact, the stock is down roughly 14.3% year to date as of July 17. However, AGYS shares are up more than 300% over the past five years.

OneSpaWorld Holdings Ltd. ( OSW )

OneSpaWorld Holdings provides spas, wellness and treatments on cruises and on land. Shares have jumped 28% year to date as the rising demand for cruise travel means more demand for OneSpaWorld's services.

The company reported $182.5 million in total revenues in Q1 2023. That's more than double the amount of revenue that the company generated in Q1 2022. Leonard Fluxman, OneSpaWorld's CEO, indicated back in May that second-quarter results were already looking promising.

"Our second quarter 2023 performance is off to a positive start, and we expect our favorable momentum to continue to build throughout the year," Fluxman said.

World Kinect Corp. ( WKC )

World Kinect Corp., formerly known as World Fuel Services Corp., is an energy, commodities and services company. The corporation sells more than 50 fuel products and has delivered over 18 billion gallons of fuel.

Cruise ships that need fuel to cover vast distances turn to companies like World Kinect. The return of travel helped the company generate about $59 billion in revenue in 2022.

Revenue growth decelerated in 2023, and the company also reported a 13% year-over-year decline in net income in the first quarter. Aviation and marine segments both experienced double-digit year-over-year gains in gross income, though.

Ira Birns, chief financial officer of World Kinect, emphasized the company's solid numbers in a Q1 press release: "Our balance sheet remains strong, providing significant liquidity to drive growth and continued investment in products and services that will further support our strategic priorities."

Should You Get On Board with Cruise Stocks?

Many cruise stocks have outpaced the stock market and rewarded investors in 2023. Significant travel growth has helped cruise lines hit revenue records and get closer to profitability. Many of these same stocks also offered dividends and reliably paid them for several years before the pandemic.

However, cruise stocks have their risks. The gains may become muted in future years as year-over-year comps become more challenging. Investors should also monitor how cruise lines cover their long-term debt and track whether the demand for travel remains this elevated.

5 of the Best Travel Stocks to Buy

Wayne Duggan June 14, 2023

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Tags: Norwegian Cruise Line , Royal Caribbean Cruises , Cruises , investing , money , Carnival Corp. , Travel , Airlines , Delta Airlines , American Airlines

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Top Cruise Line Stocks for 2023

CCL, NCLH, and RCL are top for value, growth, and performance, respectively

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Cruise line companies are seeing a strong rebound after years of COVID-related setbacks, with passenger booking rates up industry-wide. Still, just one stock—Royal Caribbean Group—has outperformed the broader market in the last year.

Royal Caribbean shares are up about 42% in the last year, while the benchmark Russell 1000 Index is up just over 1%. All other cruise industry stocks have lost value in the past year, a sign there could still be room for further recovery.

Below, we look at the top cruise line stocks for 2023 based on best value, fastest growth, and best performance. The Russell 1000 benchmark figure above is as of May 29, while all other data throughout are as of May 23.

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, this can be substituted as a rough measure of a business's value. A business with higher sales could eventually produce more profit when 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.

Source: YCharts

  • Carnival Corp.:  Carnival operates the world’s largest fleet of cruise ships. The company also owns travel-related properties such as hotels and vacation destinations. Carnival shares have fallen 16% in the last year while revenues nearly tripled for the first quarter of the year as a result of surging demand post-pandemic.
  • Norwegian Cruise Line Holdings Ltd.: Norwegian Cruise Line operates a fleet of passenger cruise ships. In addition, the company offers itineraries and theme cruises. Norwegian's revenue more than tripled for the first three months of the year as it ramped up cruise voyages again following COVID-19.
  • Lindblad Expeditions Holdings Inc.: Lindblad Expeditions owns and operates cruise ships and provides expedition cruising and travel services. The company offers both sea-based and land-based expeditions. Lindblad shares have plunged by 22% in the last year, making it among the worst-performing cruise line stocks that we looked at.

These are the cruise line stocks with the highest  year-over-year (YOY)  sales growth for the most recent quarter. Rising sales can help investors to identify companies that are able to grow revenue organically or through other means and to find growing companies that have not yet reached profitability.

In addition, accounting factors that may not reflect the overall strength of the business can significantly influence  earnings per share (EPS) . However, sales growth can also prove to be potentially misleading about the strength of a business—growing sales does not guarantee a company will eventually become profitable.

  • Norwegian Cruise Line Holdings Ltd.: See company description above.
  • Carnival Corp.:  See company description above.
  • Royal Caribbean Group: Royal Caribbean Group, formerly known as Royal Caribbean Cruises, operates either directly or through joint ventures a fleet of 64 ships with a total capacity of 150,000 berths. Total revenue almost tripled in the most recent quarter, driven by rebounds in both passenger ticket sales and onboard revenue.

These are the cruise line stocks that had the highest returns or smallest declines in total return over the past 12 months out of the companies we looked at.

  • Royal Caribbean Group: See company description above.

Shareholder Perks: A little-known benefit of holding cruise line stocks is that they offer shareholder perks. For instance, investors who hold at least 100 Carnival shares are entitled to a $250 onboard credit for cruises that are 14 days or longer, a $100 credit for cruises between 7 and 13 days, and a $50 credit for sailings of six days or less. Similarly, both Royal Caribbean and Norwegian Cruise Line offer comparable shareholder benefits. To claim these benefits, investors need to provide proof of ownership, such as a shareholder proxy card or a copy of a current brokerage statement.

Pent-Up Demand: Cruise line companies have seen a rebound in demand as customers book cruises they had put on hold during COVID-19. This positions operators in the sector to boost profits as fleets are back at total capacity with reduced COVID requirements. In March 2023, for example, Carnival Cruise Lines said it had reached record future bookings.

High Debt Load: Cruise line companies racked up substantial debt over the past several years to stay afloat during the pandemic. With inflation leading to higher fuel costs and rising interest rates , these elevated debt levels will become increasingly difficult to service, increasing the risk of the companies offering new shares to raise capital , thus diluting the stakes of current shareholders.

Future Pandemics: Cruise Line stocks sank during the pandemic, with the sector facing multiple challenges from bad publicity, no-sail orders, and a sluggish recovery. In the early stages of the health crisis, reports of major outbreaks spreading onboard put downward pressure on the group. Selling accelerated as the Centers for Disease Control and Prevention (CDC) issued and extended no-sail orders. Although forward bookings have bounced back, these challenges remind investors that future pandemics remain a risk for cruise line stocks.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read our  warranty and liability disclaimer  for more info.

As of the date this article was written, the author does not own any of the above stocks.

The Maritime Executive. " Cruising’s Rebound Raises Hopes of Normalcy Going Forward ."

YCharts. " Financial Data ."

Carnival Corp. " CARNIVAL CORPORATION & PLC PROVIDES FIRST QUARTER 2023 BUSINESS UPDATE ."

Norwegian Cruise Line Holdings Ltd. " Norwegian Cruise Line Holdings Reports First Quarter 2023 Financial Results ."

Royal Caribbean Cruises Ltd. " Form 10-K for the fiscal year ended December 31, 2022 ." Page 2.

Royal Caribbean Group. " ROYAL CARIBBEAN GROUP REPORTS FIRST QUARTER EARNINGS AND INCREASES FULL YEAR GUIDANCE ON STRONG REVENUE OUTLOOK ."

Cruise Radio. " Overview: Cruise Line Stock Benefits for Shareholders ."

Fox Business. " Carnival Cruise Lines has record future bookings, demand rebounds ."

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Top Stocks To Buy Now? 4 Cruise Line Stocks Making Headlines

April 30, 2021 — 11:11 am EDT

Written by Brett David for StockMarket.com  ->

These Top Cruise Line Stocks Are Trending In The Stock Market Now

As April comes to an end, you may be surprised to see that cruise line stocks are among the most active stocks today . Why is this industry making waves on the stock market , might you ask? Well, this is likely thanks to the latest announcement from the U.S. Centers for Disease Control and Prevention (CDC). Through a letter to the cruise industry earlier this week, the CDC announced that cruises can operate this year. For starters, the mid-July time frame would allow for summer voyages which would appeal to eager cruisers right now. At the same time, investors could be eyeing the top cruise ship stocks as well.

On one hand, conventional cruise operators like Lindblad Expeditions ( NASDAQ: LIND ) would be caught in this tailwind now. On the other hand, even travel companies that facilitate cruising such as Expedia ( NASDAQ: EXPE ) would be viable plays. As it stands, both companies’ shares are looking at gains of over 130% in the past year. However you look at it, the cruise industry just received a major boost.

By and large, all this would add to the current momentum seen by the tourism industry overall. Besides, demand for cruises and other travel services would be at a high now. This could be the case seeing as consumers have been anchored for more than a year. Given all of this, would you be willing to invest in these top cruise line stocks in the stock market today?

Top Cruise Line Stocks To Buy [Or Avoid] Now

  • Carnival Corporation ( NYSE: CCL )
  • Royal Caribbean Cruises Limited ( NYSE: RCL )
  • Norwegian Cruise Line Holdings ( NYSE: NCLH )
  • Walt Disney Company ( NYSE: DIS )

Carnival Corporation

Carnival is a leisure travel company that has been in the limelight recently. In essence, the company is a cruise company and a provider of vacations to all cruise destinations throughout the world. It covers North America, Australia, Europe, and Asia. CCL stock currently trades at $27.74 as of 10:12 a.m. ET and has been up by over 30% year-to-date. Last week, the company announced that its Costa Cruises has unveiled its 2021 cruise vacations in the Mediterranean.

cruise line stocks (CCL stock)

It has also been making huge plays ahead of reopening by July. To assure customer safety, the company will include enhanced health and safety procedures for all aspects of its cruise experience. This is crucial because as the world reopens, companies like Carnival must prioritize public health while restoring consumer confidence and driving global economic recovery in the travel and tourism industries. Also, Carnival announced last week that its Seabourn ultra-luxury cruise line has partnered with the government of Barbados to restart guest sailings. Given all these reopening plays by the company, will you consider buying CCL stock?

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Royal Caribbean Cruises Ltd

Royal Caribbean is a global cruise holding company that is based in Florida. It is the world’s second-largest cruise line operator, after Carnival Corporation. The company’s three cruise lines include Royal Caribbean International, Celebrity Cruises, and Silversea Cruises. RCL stock currently trades at $86.09 as of 10:14 a.m. ET and has been up by over 75% in the last year. On Thursday, the company provided a crucial business update and reported its first-quarter financials.

top stocks to buy now (RCL stock)

Like Carnival, the company has been announcing new itineraries for this summer. In detail, it has 11 additional ships from the Caribbean and Europe in addition to the four ships already sailing. Impressively, the company has received a positive reaction to these announcements, highlighting the strong demand for cruising. These cruises are taking place with adjusted passenger capacity and the enhanced health protocols developed with government and health authorities, and guidance from the Healthy Sail Panel. With these exciting developments surrounding Royal Caribbean, will you consider adding RCL stock to your portfolio?

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Norwegian Cruise Line Holdings Ltd.

Norwegian is a cruise line that is the third-largest cruise line in the world. The company boasts a combined fleet of 28 ships with approximately 59,150 berths. Furthermore, these brands offer itineraries to more than 490 destinations worldwide. It also plans to introduce nine additional ships through 2027. NCLH stock currently trades at $30.52 as of 10:16 a.m. ET and has seen over a 25% increase year-to-date. On Wednesday, the company unveiled the next phase of its long-awaited plan to resume cruising outside of the U.S. this summer.

best cruise line stocks (NCLH stock)

The company’s Oceania Cruises will resume operations with sailings to Scandinavia and Western Europe beginning in August and Regent Seven Seas Cruises will restart from the U.K. in September. All initial voyages will operate with fully vaccinated guests and crew in addition to the company’s robust, multi-layered SailSAFE health and safety program. Among the key features in this program includes universal coronavirus testing before embarkation. With that in mind, will you consider buying NCLH stock?

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Walt Disney Company

Last but not least, we have the Walt Disney Company. To begin with, yes, most would not immediately think of Disney as a cruise ship stock. Given its explosive growth in the streaming industry recently, I can understand. However, the Disney Cruise Line is another stream of revenue for Disney. With the CDC’s latest announcement, the company would be receiving another boost on the tourism front. This coupled with Disney’s theme parks opening could make for the perfect storm for the company. Ideally, we could see a scenario where Disney is firing on all cylinders in a post-pandemic world. Because of this, could investors continue to drive DIS stock’s prices up?

best cruise line stocks to buy now (DIS stock)

For one thing, Disney has been hard at work preparing for the continuation of cruise voyages. During a virtual event yesterday, Disney unveiled its newest cruise ship, the Disney Wish. In particular, the Disney Wish marks the fifth ship in the Disney Cruise Line fleet. On this ship, Disney is offering experiences based on the legendary Star Wars and Marvel IPs from its portfolio. According to Disney, voyages to the Bahamas and Castaway Cay will be open for booking on May 27. Yet again, the company appears to be making the most of its massive media portfolio. Time will tell if Disney can appeal to travel-starved consumers. In the meantime, would you consider DIS stock a buy?

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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3 Top Cruise Ship Stocks To Watch in 2023

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Wondering which stocks are hot on the market this year? The cruise industry has rebounded remarkably well since the pandemic, with major cruise lines returning their full fleets to service, in some cases, anticipating record-breaking bookings, according to The Washington Post.

What does this mean for stock investors? Continue reading to learn about the top three cruise stocks to watch in 2023.

Overview of the Cruise Industry

The cruise industry consists of all business entities involved with tourism and transport on cruise ships. Cruise industry operations include cruise lines, cruise ship manufacturers and entertainment companies that specialize in cruise ship entertainment.

About Cruise Lines

A cruise line is a company that operates fleets of cruise ships and sells cruise experiences to customers. An all-inclusive cruise ticket will usually include:

  • A stateroom aboard the cruise ship
  • A variety of entertainment
  • Stops at specified travel destinations, such as port stops

Global cruise lines are a major part of the larger travel industry that includes entertainment, leisure and hospitality management. Investors may see the benefits of buying stock in the rebounded cruise line companies.

Exploring the Top 3 Cruise Ship Stocks

Although cruise ship companies have suffered financial losses due to the COVID-19 pandemic and its aftermath, and the stocks are down 25% to over 50% in the last year despite consumers’ return to travel, investors can be hopeful for a strong rebound. Here’s a look at the three largest cruise line stocks based on market capitalization. As major players, they could prove to be bellwethers for cruise stocks overall.

Here’s some information about the three largest publicly traded companies in the cruise industry to help you make sound investment decisions if you choose to buy cruise line stocks in 2023.

1. Carnival Cruise Line (CCL)

Carnival once was the world’s largest cruise line operator and is now second to Royal Caribbean after the stock lost over half its value in 2022. It cruises to destinations all over the world. The cruise line’s Carnival Pride began sailing again in September 2021 — the first ship to set sail from the Baltimore cruise terminal in 18 months. This was a big deal as the world continued to reopen.

Prioritizing public health, Carnival aims to restore consumer confidence as a leading force in global economic recovery, travel and tourism. The company still has a strict vaccination and pre-cruise COVID-test policy in effect for cruises of 16 nights or more.

Although the stock is down 52.49% over the past year, it has seen a 34.99% gain since Jan. 1. In its business update for the fourth quarter of 2022, the company reported a net loss in earnings per share but noted earnings were within the range it had predicted despite challenges like high fuel prices and unfavorable currency exchange rates. While occupancy levels were still low compared to 2019, Carnival beat 2019 on some metrics, including revenue per passenger per day and total customer deposits. Advanced booked positions for 2023 are also higher compared to 2019. Carnival CEO Josh Weinstein said the momentum established last year continued into December and bodes well for 2023.

2. Royal Caribbean Cruises Ltd. (RCL)

Royal Caribbean includes three popular subsidiary cruise lines: Royal Caribbean International, Celebrity Cruises and Silversea Cruises. Royal Caribbean has eliminated pre-cruise COVID testing and vaccination requirements for most sailings.

Prior to the pandemic, Royal Caribbean had placed orders for a number of new cruise ships, including a brand new class called the Icon Class, according to the company’s blog. Although the company had to scale back its timelines, passengers can still cruise on two new ships: Icon of the Seas and the world’s largest ship, Wonder of the Seas.

Royal Caribbean, like other stocks, declined steeply last year. However, it reported better-than-expected earnings in the third quarter of 2022, and other metrics are improving as well. “Load factors,” a measure of the number of booked passengers compared to the number needed to break even on a sailing, reached 96% overall and surpassed 100% on Caribbean sailings, according to a press release. The company expected the figure to reach 100% or more by the end of 2022. Booking volumes were better than the third quarter of 2019 in terms of future sailings, which the company attributed to eased COVID restrictions.

To ensure its continued performance improvement, Royal Caribbean has implemented a three-year initiative. Goals the company expects to reach by 2025 include exceeding 2019 earnings and returns on invested capital.

3. Norwegian Cruise Line Holdings (NCLH)

Coming in as the third-largest cruise line in the world, Norwegian has a fleet of 18 ships that sail to more than 300 global destinations. The company planned to expand its fleet by six ships between 2022 and 2027.

Norwegian has no COVID testing or vaccination requirements, although destinations might have requirements of their own. This gives Norwegian the same edge Royal Caribbean has over Carnival, which requires vaccines and pre-cruise COVID tests for longer sailings.

The cruise line reached a major milestone during the third quarter of 2022, the most recent reported, with positive adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, for the first time since the pandemic began. Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd., noted that the cruise line’s 2023 booked position equaled 2019’s record levels despite record-high pricing. Norwegian expects historical-level occupancy by mid-2023.

What To Consider Before Investing In Cruise Stocks

People waited anxiously to resume their vacations aboard cruise ships, but even after cruise lines resumed sailing, COVID restrictions and the risk of being stuck overseas in the event of infection made many would-be travelers leery about booking. Now that most of those restrictions have been lifted and the major cruise lines are reporting strong demand, the cruise industry might be a great place to invest despite economic uncertainty and ongoing challenges due to COVID.

Savvy investors concentrate on industries and businesses that they know, so they can understand and thoroughly research before buying stock . Sound investing involves learning companies’ business models and how they compare to other companies in the same industry.

With as much knowledge as possible about the cruise ship industry and how well the cruise lines are positioned, well-educated investors have a leg up over other investors.

What’s the Deal on Cruise Line Stocks Today?

Despite being one of the hardest-hit industries by the pandemic, cruise line stocks could be poised to rebound. Recovery thus far has been uneven, however , and the industry still faces significant challenges stemming from the pandemic.

Good To Know The 2021 Cruise Industry News Annual Report indicates that the Caribbean, Mediterranean and Asia/Pacific regions account for the three largest markets of the world’s cruise capacity. However, a number of cruise lines canceled Asia cruises for 2022.

As the focus on responsible tourism gains momentum in light of the impacts of the COVID-19 pandemic, the cruise industry continues its commitment to a healthier and prosperous future. Carnival, Royal Caribbean and Norwegian cruise lines are making strides to come back with a vengeance.

Will investors get a good return on their investment in these cruise line stocks? Time will tell.

Daria Uhlig contributed to the reporting for this article.

Data is accurate as of Jan. 18, 2023, and is subject to change .

This article has been updated with additional reporting since its original publication.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy .

  • The Washington Post. 2022. "Cruises are smashing records despite covid on board: ‘Life goes on.’"
  • The Maritime Executive. 2022. "Carnival Projects Full Fleet Operations and Return to Profitability."

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The Best Performing Cruise Line Stocks

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The international response to COVID-19 and the consequent restriction of movements had a material impact on the valuations of cruise companies.

Best Performing Cruise Line Stocks

Government protocols introduced on large gatherings and the movement of people shackled the cruising industry, and for many a month, revenue streams were throttled as cruise liners were mothballed. Operators such as Genting Hong Kong Dream Cruises were not able to make it to the other side.

For the cruise companies that have weathered the storm and are now looking forward to a world living with COVID-19, what are some of the best to invest in?

Asktraders has come up with the below shortlist of the best cruise ship stocks to buy now.

THE CRUISE MARKET

Pre-pandemic the cruise liner market generated over $50bn in revenues per year for three major liner consortiums and a number of smaller private and subsidiary operations.

Three operators that carried over 70% of all the passengers in 2021 dominate the cruise industry (Carnival, RCI and Norwegian). Privately-held MSC Cruises is the next largest company with 10% of passengers in 2021. The remaining passengers split over speciality and smaller operators.

BEST CRUISE STOCKS TO BUY RIGHT NOW

  • Carnival Corporation (NYSE:CCL)
  • Royal Caribbean (NYSE:RCL)
  • Norwegian Cruise Line (NYSE:NCLH)
  • Lindblad Expeditions Holdings (NASDAQ:LIND)

1. Carnival Corporation (NYSE:CCL)

This cruise line giant is the largest company of its type and carried 42% of all passengers in 2021. CCL operates over 100 vessels across 10 cruise line brands. Popular cruise names AIDA, Costa Cruises, Cunard, and P&O all make their home under the CCL umbrella.

CCL’s short and long-term debt raised from $11.5bn in November of 2019 to $35bn today. The company diluted its equity by issuing another 300 million shares in 2020, raising roughly $7.8bn.

The CCL board has tapped debt and equity markets for almost $30bn in little over two years. The company has suffered losses of approximately $25bn from early 2020 to today.

Currently, CCL sales are growing quickly and on an annualised basis the second quarter of 2022 was half of pre-pandemic on an annualised basis before worldwide reopening. If CCL is able to return to the passenger and revenue numbers of 2019 and generate net income in the region of the 2019 financial year of $3bn, less the higher net interest expense, equals $1.5b net income.

This means CCL is currently trading on a price-to-earnings (PE) multiple of less than 10. The current S&P 500 PE weighted average stands at 21.63  across all stocks.

Carnival Corporation- Weekly Price Chart – 2019 – 2022

carnival corporation weekly price chart 2022

Source: eToro

For those investors willing to accept the heightened risk that comes with the increased leverage in cruise stocks, there is relative value in that CCL shares are trading at a discount to the wider market.

Furthermore, the CCL share price from January 2020 to today has fallen by over 75%. Now that the CCL board can start to project a return to business normalcy and ramp up cruise sales, now might be a good time to think about investing in CCL.

2. Royal Caribbean (NYSE:RCL)

The next largest cruise liner operator is RCL. RCL owns and operates three major brands, Royal Caribbean International, Celebrity Cruises and Silversea Cruises. RCL carried 24% of all cruise passengers in 2021.

Similar to CCL, RCL has had to tap debt and equity markets in recent times. Raising $12bn of debt and approximately $3.5bn through the issuance of new shares. Over the same period, RCL has lost approximately $12bn, though has stemmed the losses to $500m in the second quarter of 2022 and increased sales quarter over quarter by 100%.

RCL was generating a net income of roughly $1.9bn pre-pandemic. Its interest expense has increased from $400m to an annualised $1.2bn basis second quarter 2022.

In the event that RCL is able to quickly return to 2019 passenger figures and 2019 net operating margins, we can expect a net income of roughly $1.1bn (1.9-1.2+0.4) on a market capitalisation of 10.8bn. An approximation of the forward-looking PE ratio returns a share under 10 – similar to that of CCL and well below the S&P 500 index average.

The RCL PE ratio at the end of 2019 was approximately 15 – the company leverage and outlook for the market is presenting a 33% discount (10/15) on RCL today versus the end of 2019.

Royal Caribbean – Weekly Price Chart – 2019 – 2022

royal caribbean weekly price chart 2022

For those willing to fade the risk of additional lockdowns and back the ability of cruise liners to return the passenger numbers of pre-pandemic, RCL cruise stocks offer a moderate discount to traders.

3. Norwegian Cruise Line (NYSE:NCL)

Carrying a little fewer than 10% of international cruise passengers in 2021 is NCL. Headquartered in Miami, NCL operates three major cruise brands, Norwegian, Oceania Cruises, and Regent Seven Seas.

The smallest of the major listed cruise liners, NCL revenues pre-pandemic were approximately $6.5bn for 2019, generating a net income just shy of $1bn.

As a result of suffering nearly $10bn losses as a result of the pandemic, NCL has had to increase debt by $6.5bn and issue new shares worth approximately $4bn. This has left NCL with cash in hand of $2bn. The losses stemmed to $500m for the last financial quarter and revenues rallied over 100% to $1.1bn and returned to almost 70% on an annualised basis of pre-pandemic revenues.

Norwegian Cruise Line – Weekly Price Chart – 2019 – 2022

norwegian cruise line weekly price chart

NCL market capitalisation is currently trading at a shade over 2 times its net assets though, which offers a market capitalised to net assets ratio slightly better than RCL though not as attractive as CCL’s less than 1.75.

With a net interest expense of $2bn in 2021 and a pre-pandemic net income for the two years prior to 2020 of under $1bn, NCL is arguably not an investment for the more risk-averse investor.

4. Lindblad Expeditions Holdings (NASDAQ:LIND)

LIND carries just a small fraction of global cruise passengers on its speciality expedition-type adventure cruising. Travelling to far-flung corners of the world for higher paying customers looking to experience our more rugged nature in the comfort of a cruise vessel.

Without the scale of operation, the gross margin of LIND is lower than that of its larger cousins. But given its unique offering, as of Q2 in 2022, the annual revenue run rate is back above pre-pandemic.

Like other cruise vessel operators, LIND suffered losses in 2020 and 2021 and was forced to find additional funding in order to navigate the restrictions of movement due to lockdown.

LIND will have to work hard to return net operating income into the future with a much higher debt burden of 66% of total assets versus 40% pre-pandemic.

lind weejky price chart 2022

With high employment and an ageing population in the developed world, the market is there and growing for comfortable expedition adventures, if cruise companies such as Lindblad are able to quickly generate revenue to pay down debt, then there are opportunities for investors in this space going forward.

WHY INVEST IN CRUISE COMPANIES?

Cruise companies have been beaten down by the market in recent months due to their high debt burden, diluted stock and not entirely returned pre-pandemic customer base.

For the investor willing to take a bet on cruise companies’ ability to avoid any restriction of movement in the near future, quickly return passengers to their vessels and pay down debt, there are traded discounts in the stock price valuation relative to the recent past being offered.

WHAT TO KNOW BEFORE INVESTING IN CRUISE COMPANIES

There are considerable risks when investing in cruise companies. In recent months, all have suffered material losses. Boards anticipated a return to normalcy and largely maintained the existing fleet.

The indiscriminate nature of the pandemic meant that there were no operators immune from its effects, removing all bids for vessel assets and forcing the hand of cruise companies to batten down the hatches and wait out the storm.

The ‘wait-it-out’ approach has been damaging to the underlying equity of all cruise stock balance sheets, increasing leverage across the board and making an investing decision more risky.

With the increased debt burden, all cruise stocks are now trading at a discount to their net assets and future earnings relative to pre-pandemic.

This opens the door to the prospective cruise stock investor but it is not without risks and you should always do your due diligence. Asktraders  has a wealth of quantitative and qualitative tools at your disposal and you should always do your due diligence before investing your hard-earned money.

HOW TO START TRADING CRUISE STOCKS ONLINE

1. research cruise stocks.

Whenever you make an investment, it is important that you do your own research and are comfortable with your strategy. You will find a wealth of information on AskTraders  that will aid you in your decision-making process. Researching the market, analysing reported financials and quantifying your outlook for the sector and the company you are investing in are all good starting places before deciding on which cruise stock to buy.

2. Find a Broker

The next step is to  find a broker to use. There are many brokers out there. Consider how often you would like to invest and factor the fees into the ease of use. Then consider if your due diligence is more weighted to charts or to reported data and will your broker be able to provide you all the tools you need to execute as best you can?

3. Open & Fund an Account

Modern and reputable broking platforms will require Know-Your-Customer (KYC) financial and personal information from you before they sign you on to their customer database. You should be prepared to disclose sensitive personal and financial details and before commencing trading. This is very standard and protects both you and the broker. Depending on the broker, there are many funding methods, before you hand over your personal information check that the broker accepts your preferred funding method.

4. Set Order Types

Understanding order types is critical to completing the stock. A well-executed strategy plays a major part in a profitable strategy. First understand your own financial situation and trading goals. Be sure to read up on the different types of orders such as limits, stop-loss and many others. Partner your objectives with the executing tools at hand in order to have the best outcome. Different order types, when used effectively, can aid you in mitigating risk and reaching your financial objectives.

5. Select & Buy Cruise Stocks

After you feel comfortable with the above it’s time to go out there and execute. Remember, it is a process, take your time. Learn from the experts made available to you on AskTraders.com  and reach out to your broker for support whenever you need to.

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3 cruise stocks to buy for smooth sailing into 2023.

The cruise industry is working hard to recover from the pandemic, and bookings have been on an upswing lately. The U.S Centers for Disease Control recently lifted Covid 19 related restrictions, which could be a major catalyst in growing bookings in the latter half of the year. Indeed, cruise stocks remain among the highest-leverage plays investors looking to benefit from near-term catalysts can jump on.

The Cruise Lines International Association (CLIA) recently released a statement that over 75% of its member ships have resumed service, with almost all expected back on the seas by late summer. Moreover, it projects passenger metrics to grow past pre-pandemic levels by the conclusion of next year.

With cautious optimism, let’s look at three of the largest (and best) cruise stocks to invest in at this time.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Carnival  ( CCL )

Source: Flickr

Carnival Corporation  (NYSE: CCL ) is the world’s largest cruise operator, and among the best cruise stocks to own right now. With 91 ships across its cruise line banners, Carnival has an overall capacity of over 243,000 berths. That’s massive.

The company’s ships have been docked at port for the better of the past couple of years. Accordingly, CCL stock has struggled under the weight of its massive debt load. However, in recent quarters, revenues have started to flow in at an incredible pace, and are likely to continue growing at a robust clip.

Revenues in the company’s second and third quarters have grown by 4,702% and 688.5%, respectively , on a year-over-year basis. Moreover, Carnival’s CFO David Bernstein talked about the cruiseliner’s potential to sail past its 2019 EBITDA levels next year with the removal of coronavirus restrictions. Bookings for the full year are likely to be above historical averages, and at considerably higher prices compared to its 2019 results.

Also, CCL generated more than $300 million in adjusted EBITDA in the third quarter, expecting to narrow down net losses in the upcoming quarters. These forecasts are highly encouraging, considering the seasonality of its business. Despite these positives, CCL stock is trading as if it was going bankrupt.

Royal Caribbean Cruises ( RCL )

Source: NAN728 / Shutterstock.com

Royal Caribbean Cruises  (NYSE: RCL ) is another leading cruise line operator with a healthy 25% market share in the sector. Similar to its peers, RCL stock has been pulverized in the markets over the past couple of years. However, its business has bounced back from the pandemic with solid operating results.

In its second quarter, the company posted a handsome revenue beat, with revenues skyrocketing from $50.9 million to $2.18 billion as it returned its entire fleet to operation. Moreover, despite posting a hefty loss in the quarter, Royal Caribbean’s management expects it to swing to GAAP profitability in the upcoming quarter.

Perhaps one of the biggest advantages for RCL is that the majority of its long-term debt of $17.74 billion is tied to fixed interest rates. Hence, it’s effectively shielded from the effects of the Fed’s rampant rate hikes. Moreover, the company’s aggregate debt load is significantly less than its competitors. This bodes well for its long-term recovery.

Norwegian Cruise Line ( NCLH )

Source: Nazar Skladanyi / Shutterstock.com

Norwegian Cruise Line  (NYSE: NCLH ) is another leading cruise line operator specializing in upscale cruising. Moreover, this company operates a world-class fleet, which continuously improves every year.

Similar to its peers, NCLH is experiencing a resurgence of sorts. The company recently announced its final move to remove Covid-19 restrictions. It announced the removal of all testing, masking, and vaccination requirements. The removal of restrictions will likely lead to a massive surge in bookings in the upcoming quarters at prices above pre-pandemic levels.

Analysts are already forecasting 2023 revenues for the company to reach $8 billion, a $1.5 billion improvement from 2019 levels. Moreover, analysts at UBS assigned a bullish rating to the stock , seeing its earnings per share price surging to $1.55 in 2023 compared to its prior forecast of $1.44. Moreover, UBS assigned a price target of $15, which represents nearly 25% upside from current prices.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com  Publishing Guidelines.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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The post 3 Cruise Stocks to Buy for Smooth Sailing Into 2023 appeared first on InvestorPlace .

  • Earnings News
  • On the Move

Cruise line stocks rally after solid outlook from Norwegian Cruise Line

Norwegian Star is a cruise ship owned and operated by Norwegian Cruise Line shipyard in Santorini, Greece

Tatiana Dyuvbanova

Norwegian Cruise Line Holdings ( NYSE: NCLH ) rallied on Tuesday after Q4 profit smashed expectations, despite the disruptions around the Red Sea during the quarter.

Norwegian Cruise Line ( NCLH ) management said the company has continued to see exceptional demand for its namesake brand, with bookings and pricing at higher levels than 2023 for all four quarters of 2024. Oceania Cruises and Regent Seven Seas Cruises also continued to see strong demand across all geographies with the exception of redeployed itineraries due to cancellations in the Middle East and Red Sea. Of note, onboard revenue per passenger cruise day was up 20% during the quarter compared to 2019, with broad-based strength across all revenue streams. NCLH's advance ticket sales balance, including the long-term portion, ended 2023 at a year-end record of $3.2B, approximately 56% higher than at the end of 2019. Gross margin per capacity day was approximately $79 in the quarter. Net yield growth was approximately 8.2%, or 8.6% versus 2019 on a constant currency basis, in line with guidance.

Looking ahead, the cruise line operator sees 2024 EPS of about $1.23 vs. $1.21 consensus and adjusted EBITDA of $2.2B vs. $2.1B consensus. NCLH now sees a Q1 profit, instead of a loss.

Shares of Norwegian Cruise Line Holdings ( NCLH ) jumped 10.15% in early trading to $17.61. Over the last 52 weeks, NCLH is up 6.8% after many peaks and valleys. Royal Caribbean Cruises ( RCL ) rose 2.82% and Carnival ( CCL ) was up 5.40% .

More on Norwegian Cruise Line Holdings

  • Norwegian Cruise Line: Deteriorating Risk Matrix
  • Norwegian Cruise Line: Assessing Risks And Realities Of A Capital Intensive Business
  • Norwegian Cruise Line Holdings Non-GAAP EPS of -$0.18 misses by $0.04, revenue of $1.99B beats by $30M
  • Norwegian Cruise Line Holdings Q4 2023 Earnings Preview
  • Seeking Alpha’s Quant Rating on Norwegian Cruise Line Holdings

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