best cruise ship stocks

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.

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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

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

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Best Value Cruise Line Stocks

Fastest growing cruise line stocks, cruise line stocks with the best performance, advantages of cruise line stocks, risks of cruise line stocks.

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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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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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• investing ideas
• The 8 Best Cruise...

The 8 Best Cruise Stocks To Buy Right Now!

• By Noah Zelvis
• Oct 05, 2022

As Covid-19 swept around the globe, many were horrified to see outbreaks taking place aboard cruise ships.

As travel became more restricted, cruise lines were among the first in the travel industry to see setbacks.

Major cruise ships are just now starting to set sail again, and people will be seeking opportunities to enjoy the travels they haven’t been able to for over a year.

This makes right now a great time to look into cruise stocks.

We’ve compiled a list of the best cruise  stocks to buy  now to take advantage of the likely market upswing in the coming months.

Best Cruise Stocks

Norwegian cruise line holdings (nyse: nclh).

Norwegian Cruise Line is a cruise line incorporated in Bermuda and headquartered in Miami.

Founded in 1966, Norwegian Cruise Line is the third largest cruise line in the world in terms of the number of passengers.

The company has a fleet of 28 different ships that sail to nearly 500 destinations.

The forward-thinking company looks to add nine more ships to their fleet in the next five years.

Additionally, the company owns two private islands in the Caribbean.

Norwegian Cruise Line Holdings controlled about 8.6% of the world’s cruise passenger market in 2021.

The company now holds a market cap of $9.67 billion.

In 2019, the company saw revenue of over $6 billion.

Like all the other cruise stocks on our list, Norwegian saw a near-complete loss of revenue for the 2020 year.

The cruise line just started sailing again  in July of this year.

Norwegian Cruise Line Holdings has been working closely with the CDC to ensure that the safety of their guests is taken into consideration on their cruise ships.

Norwegian Cruise Line Holdings hopes to see a higher share price now that sailing has returned.

Royal Caribbean Group (NYSE: RCL)

Royal Caribbean Group (formerly known as Royal Caribbean Cruises LTD.) is the second-largest cruise line in the world.

They currently own four separate cruise lines: Royal Caribbean International, Celebrity Cruises, Azamara Cruises, and Silversea Cruises.

The company is incorporated in Liberia and headquartered in Miami, Florida.

Royal Caribbean currently has a total of 24 ships in its fleet, with more coming.

They aim to wow their guests with a luxurious formal setting and high-tech entertainment.

When compared with other cruise lines, Royal Caribbean is considered a high-end brand.

Royal Caribbean saw a significant drop in market performance due to Covid-19 but is making strides to regain lost shares as they start sailing again.

The company’s market cap is currently over $20.7 billion.

With a more loyal customer base, Royal Caribbean may see a quicker rebound in the coming months than smaller cruise lines.

Investors may need to be patient with the amount of time they hold this stock (or any other hospitality stock, for that matter).

Those willing to take the risk may see incredible returns in the long term.

Carnival Corporation & PLC (NYSE: CCL)

Second to none, Carnival is currently the world’s largest travel leisure company, followed by Royal Caribbean and Norwegian.

As a British-American cruise line operator, Carnival is headquartered in Miami, Florida. Carnival owns a portfolio of 87 ships across ten cruise line brands.

The company has two subsidiaries – Carnival Corporation, which operates in the US, and Carnival PLC, which operates in the UK.

Carnival saw its highest market performance in 2018, which it has struggled to reach since.

Since the pandemic hit, Carnival has not done nearly as well as Royal Caribbean, despite their more significant market share.

The company started sailing again in July, mandating that at least 95% of passengers be vaccinated in order to leave port.

While the industry is currently struggling, this company could provide excellent returns in the long run.

Since Carnival is the largest player in the game, it may be the best long-term investment, especially since prices are low right now.

Best Cruise Ship Stocks To Buy

Lindblad expeditions holdings, inc. (nasdaq: lind).

Lindblad Expeditions is a cruise line that has partnered with National Geographic to provide an immersive vacation experience for its guests.

Their fleet includes 15 ships that sail to over 27 locations.

This company offers travel that goes beyond what you’d typically expect on a cruise line.

Using their partnership with National Geographic, Lindblad offers unique expeditions where their customers can see natural beauty up close and personal.

The company has nearly reached a $733 million market cap.

Astonishingly, Lindblad has bounced back from the market crisis much better than any other stock on this list.

They’ve recovered their lost share price since the pandemic and are holding near that amount.

Part of this may be due to the fact that Lindblad’s ships are typically smaller in size and have a lower guest capacity.

This gives the company a competitive advantage, meaning now could be a great time to invest.

Investors will need to consider the fact that travelers may still not be comfortable boarding a secluded ship environment with strangers for quite some time.

The Walt Disney Company (NYSE: DIS)

Known for its media and entertainment production,  Disney  has now reached a market cap of $323 billion.

After a slight downturn in March, Disney is performing more or less better than they ever have.

Much of the value Disney derives comes from their entertainment venues.

These include multiple parks and their cruise ships, catered to children and family experiences.

Their current performance has come as quite a surprise, showing us just how versatile, risk-averse, and diversified their stock really is.

Disney has been able to continue its forward movement by diversifying its industry focus.

With the launch of Disney+, the company was able to take advantage of the huge demand for video streaming platforms, made even more popular by the pandemic.

Experts have projected Disney to have below-average returns for the next few years, reflecting the current overvaluation.

OneSpa World Holdings Ltd. (NASDAQ: OSW)

OneSpa is a holdings company that provides product solutions to cruise lines and other businesses in the hospitality industry.

Their operations include the sale of top-end health, beauty, fitness, and wellness services.

Some of the companies they service include cruises on our list, including Norwegian, Royal Caribbean, and Carnival cruises.

Whether their clients are sailing or located at a variety of travel and hospitality locations on-land, OneSpa is one of the major luxury spa providers for the highest-end hospitality brands.

OneSpa went public near the last month of 2017. Stock trades are currently going for $10.

Although they’ve reached the stock price they had when they went public, the company still has not reached pre-pandemic highs.

A market cap over $735 million suggests that the company has the potential to continue development in the future.

Now that cruise ships are sailing again, their positive momentum should continue.

World Fuel Services Corporation (NYSE: INT)

Based in Miami, Florida, World Fuel Services is an energy, commodities, and service company.

The hospitality industry was not the only industry affected by Covid-19 as consumers have traveled less.

The fuel service industry also saw a significant drop in performance, reflected in the incredibly low price of gas.

The company has three individual segments: land, aviation, and marine life.

The marine life segment will be most relevant to the cruise industry

In the past, World Fuel Services has performed at consistently high prices.

The company has struggled to return to past performance levels but sees a 33.60% share price increase over the past year.

With three unique and separate sectors, the company’s diversification will help to ensure healthy returns across its three sectors as development takes place with the Covid-19 vaccines.

All three of this company’s divisions will likely improve now that cruise ships are sailing again.

This means the potential for significant returns for investors who are willing to invest now. 

Cruise Ship Penny Stocks: Ship Builders

Fincantieri (otcmkts: fncnf).

Fincantieri is the first stock on our list that is solely devoted to cruise ship construction.

Based in Italy, Fincantieri is the largest shipbuilder in Europe and the fourth largest shipbuilder in the world.

After going public just in 2018, Fincantieri’s market performance has decreased each year until finally seeing growth in 2021.

It seems they may have gone public at one of the least advantageous times, considering the current performance of hospitality stocks.

Fincantieri has ship creation backlogs through the year 2027.

Some of their notable customers include the cruise lines on our list, such as Carnival, Norwegian, and Royal Caribbean.

Given their well-established industry presence, this stock shows some promise for investors.

Fincantieri trades are now $0.86 a share. This top shipbuilder could see tremendous growth in the near future.

Should I Buy Cruise Line Stocks?

Investors looking to take on a little risk for significant returns should consider purchasing some of these cruise stocks.

That said, investors need to understand that, although ships are starting to sail again, the future of cruising is still uncertain.

It may take some more time before consumers are comfortable traveling and going on cruises.

The international economy, hotels,  airlines , and cruises all hope to see market performance closer to what they would have seen before the pandemic began.

Best Cruise Ship Stocks: Final Thoughts

2021 brings new hope and opportunities as cruise ships finally resume travel.

Many companies are still at a low after being shut down for so long, making now a great time to invest.

As things begin to return to normal, all signs point to cruise stocks seeing healthy increases.

More From The Stock Dork:

Noah Zelvis is a writer with more than 18 years of experience under his belt. He started out by blogging his adventures overseas and quickly found success creating paid content thanks to his ability to convey his articles in a clear and concise manner. Equipped with an engineering background and an analytical mind, Noah has a passion for all things business and finance. His personal investment journey began at a young age, helping his grandma with her portfolio. That spark blossomed into a never-ending search for the best stocks Noah still carries today. He’s thoroughly researched the corporate financial world as well and has an innate understanding of the banking and credit sector. Other published works also include travel, running, video games, product reviews, and more. Now, Noah uses his expertise to share his financial and investment know-how here at Stock Dork. When not at his desk, you’ll likely catch Noah traveling or running.

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Look at the Stocks Leading the Market Now

Devastated at the height of the pandemic, cruise lines have become top performers.

By Jeff Sommer

Jeff Sommer is the author of Strategies , a weekly column on markets, finance and the economy.

Many top performers in the stock market for the first half of this year were exactly what you would expect, if you’ve been following the news.

Big tech companies were well represented at the front of the pack, led by Nvidia, which makes computer chips that power artificial intelligence programs. It was followed closely by Meta, the Facebook owner, which has been promoting its own A.I. prowess. Tesla, the electric vehicle champion, wasn’t far behind.

But what were cruise ships doing near the very pinnacle of the stock market listings?

At midyear, three of the big cruise companies — Carnival, Royal Caribbean Group and Norwegian Cruise Line Holdings — were among the top 10 stocks in the S&P 500.

Consider that only three years ago, in the first months of the coronavirus pandemic, all cruise lines suspended operations and that in the ensuing months, the shares of publicly traded cruise companies were devastated.

Now, with fears of contagion ebbing and pent-up demand for pleasure trips being unleashed, cruise lines have had a remarkable change of fortune.

Inconsistent Returns

Each of the cruise line stocks had astonishing gains for the first six months of the year, but they are still down significantly from the start of 2020.

Here are their returns, according to FactSet:

Carnival, up 134 percent for the first six months of 2023 but down 63 percent since the start of 2020.

Royal Caribbean Group, up 110 percent in the first half of 2023 but down 22 percent since 2020.

Norwegian Cruise Line, up 78 percent in the first half of 2023 but down 63 percent since 2020.

Returns like these might be puzzling if you were unaware of what happened on the planet in the last three years. But factor in the pandemic and the subsequent economic recovery, and the cruise line stock and bond performance tracks nicely.

It’s part of a larger pattern.

Just as cruise lines have begun to come into their own, a series of companies that prospered during the pandemic are laggards now. Peloton, Zoom and Etsy are trailing in this year’s stock market performance derby. And major pharmaceutical companies, like Moderna and Pfizer, whose shares took off when the firms were providing scarce and desperately needed vaccines against Covid-19, are among the poorest performers in the S&P 500.

The Pandemic

Briefly put, it wasn’t until December 2019 that the first reports of the emergence of a novel coronavirus began to emanate out of China — and in March 2020 that the World Health Organization declared that a pandemic was underway. In January, cruise lines began canceling port calls in China.

In January 2020, the Diamond Princess , a luxury ship owned by Carnival, began an ill-fated journey in Yokohama, Japan. More than 3,700 passengers and crew members were stranded on board for weeks, with little information about the pandemic.

But the virus spread relentlessly, and more than 700 people ultimately tested positive. In those early days of the pandemic, when people lacked natural immunity against the disease, and effective treatment and vaccines were not yet widely available, nine passengers died.

All major cruise lines suspended operations, as passengers canceled their bookings en masse. It became evident that a cruise ship wasn’t an ideal place to be in the middle of a pandemic.

In the stock market, cruise line shares plummeted as 2020 wore on. In that pandemic year, Carnival fell 57 percent, Royal Caribbean 44 percent, and Norwegian 56 percent. The companies had virtually no revenue and mounting debt, and their ability to remain going concerns was in doubt. They survived by taking on enormous debt loads and paying sky-high junk-bond yields, which were needed to attract investors.

The joyful atmosphere needed for a successful vacation at sea seemed unattainable.

An Incipient Recovery

It was only in 2022 that their finances — and share prices — stabilized, and only this year that they have begun to report sufficient earnings and cash flow to show signs of paring down their debt and returning to steady profit-making operations. In a conversation with stock analysts after reporting earnings in late June, Josh Weinstein, the chief executive of Carnival, said the company’s business volume was approaching 2019 levels for the first time since the start of the pandemic and, in some metrics, beginning to exceed it.

According to a transcript of the same session, David Bernstein, the company’s chief financial officer, said Carnival was pouring cash into debt reduction, “driving more than $8 billion in total debt reduction through 2026,” down from a $35 billion peak early in 2023.

These debt payments, combined with increased revenues, should enable the company to “approach investment grade” in its bond ratings in 2026, Mr. Bernstein said. Because of Carnival’s improving financial picture, the yields on the company’s debt have been declining and the price of its bonds, which move in the opposite direction, have risen.

The specifics of each company matter, of course. What the cruise lines have in common is that all have heightened safety procedures aimed at stemming the spread of any future outbreaks on board, commissioned new ships, taken measures to cut costs and embarked on fresh marketing campaigns. Wall Street analysts, including those at JPMorgan Chase, Bank of America and Jefferies, have given them high grades and helped to drive up their share prices.

Perhaps the magic of sea cruises is back. Certainly no one needs a recurrence of the dismal events of 2020.

In prepandemic times, I took a couple of lovely cruises. On one trip, three generations of my extended family were able to see the world together, while participating separately in age-appropriate recreation — on board, in the water and on land. So I’m personally pleased by the beginnings of a sea cruise renaissance, though not ready to sail again quite yet.

As an investor, I see the stock performance of the cruise lines this year less as a question of whether this is an opportune time to buy their shares and more as an affirmation of the ever-present need to diversify. What may seem safe today could easily become hazardous tomorrow.

Harry Markowitz, a Nobel laureate in economics who died last month, transformed modern investing with his teachings about how rigorous diversification can reduce risk. A decade ago, during a volatile stretch in the stock market, he told me that ordinary investors would be better off if they forgot about individual stocks and bought broad low-cost stock and bond index funds instead.

Allocate them in a proportion that makes you comfortable, and then devote yourself to more pleasant pursuits. Mr. Markowitz convinced me. As for pleasant pursuits, go with what delights you.

That could even be a sea cruise, if you find them fun and, at this stage, safe enough for a carefree voyage.

An earlier version of this article misstated when the World Health Organization declared a coronavirus pandemic. It was March 2020, not January 2020.

How we handle corrections

Jeff Sommer writes Strategies , a column on markets, finance and the economy. He also edits business news. Previously, he was a national editor. At Newsday, he was the foreign editor and a correspondent in Asia and Eastern Europe. More about Jeff Sommer

The Best Performing Cruise Line Stocks

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

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

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

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

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.

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.

People Who Read This Also Read:

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The Top 3 Cruise Stocks to Buy in April 2024

April 23, 2024 — 06:00 am EDT

Written by Ian Cooper for InvestorPlace  ->

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Use recent weakness in cruise stocks as an opportunity.

At the moment, the top three cruise stocks are all oversold after a recent pullback. But that won’t be the case much longer with most already starting to pivot higher. Even the travel exchange-traded fund (ETF), the Defiance Hotel, Airline, and Cruise ETF (NYSEARCA: CRUZ ) is oversold and ready to pivot higher. Better, not only does the ETF offer you exposure to leading cruise stocks, like Royal Caribbean (NYSE: RCL ) and Carnival (NYSE: CCL ), but it also diversifies with leading hotel and airline stocks .

In fact, I’d also use weakness in the CRUZ ETF as an opportunity. Last trading at $21.38, I’d like to see it initially retest $23 a share immediate term. 

Or, if you’d rather just stick with some of the top, oversold individual cruise stocks, here are three top ones you may want to consider buying immediately. Most won’t stay this oversold for long.

Royal Caribbean ( RCL )

Source: ImagineStock / Shutterstock.com

After testing $140.58, Royal Caribbean pulled back to support at its 50-day moving average. Even better, RSI, MACD, and Williams’ %R are all starting to pivot from over-extensions into oversold territory, as well. Last trading at $129.21, I’d like to see RCL initially retest prior resistance at $140.58 immediate term.

Helping, analysts at Mizuho just initiated a buy rating on the RCL stock , with a price target of $164. “The firm says the company should be able to drive incremental demand through the expansion of existing destinations, the development of new attractions, as well as differentiated ships,” according to TheFly.com .

Barclays’ analysts also raised their price target on RCL to $154 with an overweight rating ahead of the company’s earnings call on April 25. The firm expects to see positive demand and yield updates when RCL reports its earnings later this month. Goldman Sachs even added RCL to its Conviction List as part of the firm’s “U.S. Conviction List – Directors’ Cut.”

Carnival ( CCL )

Source: NAN728 / Shutterstock.com

Carnival is also attractive on its latest pullback to $14.12 after testing a high of $17.68. It’s also over-extended on RSI, MACD, and Williams’ %R and is starting to slowly pivot higher. From its last traded price of $14.12, I’d like to see it initially retest $17.68 and potentially test $19.50.

Analysts at. Tigress Financial just raised their price target on CCL to $25 , with a buy rating. All thanks to record booking trends driven by strong consumer demand for cruising. Even Barron’s recently noted that CCL’s recent pullback is an opportunity worth buying. JPMorgan also raised its price target to $23 with an overweight rating on the stock. 

Barclays raised its price target to $25 with an overweight rating, noting “The company’s Q1 results were ‘solid’, with ‘particularly bullish’ pricing commentary and forward commentary on bookings/demand momentum that showed no discernible cracks,” as noted by TheFly.com .

Much like RCL, CCL should have plenty of smooth sailing ahead.

Norwegian Cruise Line ( NCLH )

Source: Nazar Skladanyi / Shutterstock

Even the pullback in Norwegian Cruise Line (NYSE: NCLH ) is attractive.

After testing a high of about $21.50, it dipped to $17, where it became oversold on RSI, MACD, and Williams’ %R, as well. Much like RCL and CCL, NCLH is also starting to pivot higher. From its current price of $18.29, I’d like to see it retest $21.50 initially.

Even more attractive, the company just ordered eight new ships, which is the biggest order in company history. “We expect these strategic investments will secure our growth trajectory, significantly boost our earnings profile, and enhance shareholder value well into the future,”  added Chief Financial Officer Mark Kempa .

With earnings, for fiscal year 2023, the company posted a 32% jump in revenue, as compared to 2019. Revenue per passenger cruise day was up 17% from 2019. In addition, advance ticket sales at the close of 2023 were up 56% from 2019 to $3.2 billion. All of those numbers are only expected to increase from here, with much stronger demand.

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

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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The post The Top 3 Cruise Stocks to Buy in April 2024 appeared first on InvestorPlace .

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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4 Reasons to Buy Carnival Stock Like There's No Tomorrow

Shares of Carnival Corp. (NYSE: CCL) have been volatile since the pandemic restrictions eased.

The stock has recovered some of its losses during the crisis that shut down the cruise industry , but it's fallen this year as hopes for interest rate cuts have faded. Now, the sell-off looks like a good buying opportunity for value-minded investors. Here are four reasons why.

1. Carnival is posting record results

Don't be fooled by the weakness in the stock price. Carnival's top-line performance is as strong as ever. In its recent first-quarter earnings report, Carnival posted record first-quarter revenue at $5.4 billion, plus record net yields and net per diems, metrics that measure the revenue and profit per passenger per day, saying they significantly exceeded 2023 levels.

Booking volumes also hit an all-time high, and management said prices were "considerably higher" than a year ago. Deposits reached a first-quarter record as well at $7 billion, and the company raised its guidance to reflect the better-than-expected bookings and revenue trends.

The strong revenue growth shows there's strong demand for Carnival cruises despite economic uncertainty and geopolitical tensions.

2. The bottom line is improving

Carnival has a big debt hole to dig out of after borrowing billions to stay afloat during the pandemic, but it's making progress on the bottom line as well as the top line.

In the first quarter, the company reported a generally accepted accounting principles ( GAAP ) operating profit of $276 million, compared to a loss of $172 million in the same quarter the year before. It also narrowed its interest expense from $539 million to $471 million thanks to debt reduction, leading to a nearly $500 million improvement on the bottom line to a loss of $214 million. Investors should be aware that the first quarter is seasonally weak and Carnival company is on track for a GAAP profit for the full year.

On the basis of adjusted earnings before interest, taxes, depreciation, and amortization ( EBITDA ), the company is profitable and is targeting EBITDA of $5.63 billion for the year, which is a 30% improvement from 2023 and includes a modest impact from rerouting due to the conflict in the Red Sea.

3. Carnival is expanding

Carnival continues to build new ships, refreshing its fleet and expanding its capacity to meet growing demand. In the recent earnings report, Carnival said it ordered its first newbuilds in five years, adding two ships that will come online in 2027 and 2028.

It also just welcomed the Carnival Jubilee to its fleet, which took its maiden voyage in December 2023, and the Carnival Firenze is set to debut this spring.

The ships coming online now should help drive revenue and profits higher, and the newbuild purchases show the company's confidence in long-term demand for its cruises.

4. The stock is well priced

Valuing Carnival right now is a little tricky because of its debt burden and because it grew its share count significantly during the pandemic restrictions to raise funds.

However, according to most popular metrics, the stock looks like a bargain. On a forward P/E basis, the stock trades at a valuation of just 14, which looks like a great price for a company that's recovering from the pandemic. While that ratio doesn't include Carnival's debt, it does take the interest expense into account, showing that the company can service that debt and still deliver a strong profit.

Compared to its pre-pandemic price, Carnival is still down by more than two-thirds, and it seems reasonable to expect the stock to return to that level as it pays down debt and continues to benefit from strong demand.

Meanwhile, the Federal Reserve is expected to lower interest rates later this year, which would help Carnival refinance its fixed-rate debt and see lower rates on its variable-rate debt.

Over the coming years, there are a number of levers that Carnival can pull to grow the business, and that should make the stock a winner.

Should you invest $1,000 in Carnival Corp. right now?

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy .

These ETFs Give Excellent Exposure to the Cruise Line Industry

Cruise lines have been through the ringer, but investing in down stocks could mean heightened return upon recovery.

Dec. 23 2020, Updated 5:09 a.m. ET

The pandemic has hit the market hard, but the cruise industry has taken a particularly fervent beating. Cruise line stocks have been volatile over the course of 2020, but investing in individual stocks does bring more risk than a diversified fund.

However, investors can use ETFS that invest in cruise lines to boost capital into the industry without posing enormous risk. As Norwegian Cruise, Carnival Corporation, and Royal Caribbean continue to await their first post-pandemic voyage, baskets of stocks are working together to keep the sector afloat in the market.

Are there any cruise line ETFs?

There aren't any ETFs that are specific to cruise lines only, but there are plenty of ETFs that include major cruise companies in the mix.

In a basket of securities like an ETF, this is a good thing for a struggling industry as well as the investors who choose to put their capital at risk. After all, ETFs are more tax-efficient and they offer increased security when it comes to returns.

Cruise lines are in the 3X ETF

$HIBL — Jonah Lupton 🇺🇸 (@JonahLupton) November 9, 2020

The Direxion Daily S&P 500 High Beta Bull 3X Shares goes by "HIBL" on the NYSE ARCA. It's only been around since Nov. 2019, but this fund aims to outperform the S&P 500 High Beta index. More than 80 percent of the 3X ETF goes toward financial instrument assets, but the remainder is a diverse array.

Norwegian Cruise Line Holdings Ltd. accounts for 0.24 percent of the 3X ETF. That actually puts Norwegian in fifth place as far as total net assets. They're beat only by Discover Financial Services, Tapestry Inc., Dreyfus Government Cash Management, and Financial Square Treasury Instruments (the last two have the highest holdings at 25.52 percent and 29.52 percent, respectively).

Check out this cruise line ETF from Vanguard

$VCR on my watchlist. Funding that bucket soon. — Rio♻️ (@tmc7o7) December 15, 2020

The main Vanguard ETF containing noteworthy cruise line securities is the Vanguard Consumer Discretionary ETF ("VCR"). VCR is basically the ETF version of VCDAX, Vanguard's discretionary index fund. The ETF has an 18.46 percent five-year return, but its expense ratio is rather low at 0.1 percent. 

Hotels, resorts, and cruise lines account for three percent of the ETF as of Nov. 30.

Norwegian Cruise Line ETFs are plentiful

Norwegian Cruise Line has found its way into at least 85 ETF baskets. Norwegian has the most exposure in the Invesco S&P 500 Equal Weight Consumer Discretionary ETF (or "RCD" on the ARCA), where it holds 2.05 percent. 

Other options include the iShares Morningstar Small Cap Value ETF (or "JKL" on the same exchange) and the Direxion Daily S&P 500 High Beta Bull 3X Shares.

There's no shortage of ETFs with Carnival Cruise Line holdings, either

*Ticker wrong. It’s $SFYF . — Eric Balchunas (@EricBalchunas) July 1, 2020

Carnival Cruise Line has 110 ETF holdings. The stock's most prominent allocation can be found in the SoFi 50 ETF, or "SFYF" on the ARCA. There, it holds about 1.98 percent. 

Other ETFs include the iShares Evolved U.S. Media and Entertainment ETF ("IEME" on the BATS Exchange) and the Vanguard Small Cap Value Index Fund ETF ("VBR" on the ARCA).

Latest Royal Caribbean Cruises Ltd News and Updates

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6 Best Cruise Line Stocks You Should Watch

Haiden Holmes

Jun 20, 2022 11:33

Pandemic ravaged cruise line stocks because of a series of headlines about diseased guests being turned away from ports for several weeks. It would be a mistake to believe that this spells the end for cruise ship stocks .

As tourists return to the seas, many experts see a chance for growth in underpriced cruise companies, which many investors rushed to acquire when the market was at its lowest point, anticipating rewards from its recovery.

Cruise line industry trends

During periods of robust economic expansion, cruise line operators often see a substantial increase in share profits; therefore, their stocks may do quite well. Obviously, the opposite is also true, and cruise line stocks may become very dangerous during economic downturns or other external circumstances, such as the COVID-19 pandemic of 2020, the repercussions of which are still being felt today.

During the decade of consistent economic expansion, several cruise line stocks obtained the capacity to distribute capital to shareholders via high dividend increases, making the group of stocks potentially attractive to income investors.

Two of the three main cruise line operators, Royal Caribbean Cruise Lines (RCL) and Carnival Cruise Lines (CCL), used to pay dividends to shareholders until the worldwide pandemic stopped the cruise industry as a whole. The event demonstrated how fragile consumer discretionary stocks could be in difficult situations, and no cruise lines now pay dividends to shareholders.

In addition, while cruise companies continue to operate at reduced capacity, there is no timetable for the reintroduction of dividend payments. Instead, cruise companies prioritize cash conservation to prevent defaulting on debt obligations.

Cruise stocks have ridden out the storm.

It took longer for cruise ships to recover than other tourism sectors such as airline stocks or hotel stocks. Many of the most popular cruise spots did not return until late 2021, just when Omicron dealt another blow.

When reservations resumed in December 2021, the CDC recommended avoiding cruise ships and upped its warning level to 4, or "extremely high."

2 The Russian invasion of Ukraine in 2022 presented another unanticipated setback, which disrupted bookings for Baltic and other European tours3.

However, market analysts concur that the long-term outlook is positive. Bookings to Alaska and the Caribbean are robust, and passengers who cancel their reservations just rebook later in the year. Carnival Corp. reported that bookings for the second half of 2022 exceeded those for 2019; at Royal Caribbean, 2022 bookings are close to 2019 levels; P&O's Caribbean cruise for 2022 sold out within six hours, and Virgin Voyages and Crystal accelerated the release date of their 2023 itineraries due to high demand.

Passenger traffic is projected to increase by 96 percent YOY to 13.9 million in 2021, but this is still below 2019's 29.7 million, while worldwide expenditure across 60 main cruise markets increased by 65 percent YOY to $19.4 billion in revenue.

Should I invest in cruise line stocks?

Consider purchasing any of these cruise stocks if you're ready to take on a moderate amount of risk for substantial gains.

However, investors must be aware that the future of cruising remains unclear, despite the fact that ships are once again sailing.

Before people feel comfortable traveling and going on cruises, it may take some time.

The worldwide economy, hotels, airlines, and cruise lines all anticipate a return to pre-pandemic levels of market performance.

Best cruise line stocks

Royal caribbean cruise lines (rcl).

Since its founding in 1969, Royal Caribbean Cruises has expanded into five distinct brands that operate 63 cruise ships. The firm provides consumers with over one thousand unique locations through its varied routes.

Royal Caribbean is the second-largest cruise line in the world, serving six continents. Prior to COVID, the company's yearly sales were around $11 billion, and its current market valuation is $14.8 billion. According to current forecasts, Royal Caribbean's income will surpass pre-COVID levels in 2023.

On May 5, 2022, Royal Caribbean disclosed profits for the first quarter, which were extremely poor but indicated that the corporation is on the road to recovery. The adjusted loss per share was $4.57, nine cents below the consensus expectation. The first-quarter revenue increased from almost nothing in the prior year to $1.06 billion but fell short of estimates by $90 million.

However, the business emphasized that it continues to make progress on its long road to recovery from the COVID shutdown and offered positive comments for the balance of 2022 and beyond.

By the end of the first quarter, Royal Caribbean had returned to service 54 ships across its five brands, representing about 90 percent of its worldwide capacity. Approximately 800,000 visitors traveled with the company's brands during the first quarter, and total revenue per passenger cruise day set a new record. This critical revenue statistic assesses a cruise line's ability to increase the per-guest price; thus, the result is fairly favorable.

The positive operating cash flow of Royal Caribbean in April 2022 marked a turning point for the corporation, which had suffered since the COVID epidemic. Management anticipates that 100 percent of the fleet will be fully operational by the start of the summer season in 2022, a significant milestone on the road to recovery.

The first quarter of 2022 saw more bookings than the fourth quarter of 2021, and bookings rose weekly over the period. In addition, compared to the same times in 2019, which occurred prior to the implementation of COVID, bookings were "substantially" higher for all periods. This indicates the company's optimism for the remainder of the year and into 2023. On this basis, management anticipates that load factors will continue to grow each quarter of this year until they surpass 100 percent by the end of 2022.

All quarters for 2023 are presently booked within historical volume norms but at record price levels. In addition to increasing revenue, this will also improve margins and cash flow. On the basis of these considerations, Royal Caribbean anticipates profitable operations in the second half of 2022.

Royal Caribbean continues to optimize its fleet via the purchase of more fuel-efficient ships and the promotion of onboard spending, as well as the sale of older vessels. This initiative will assist the company in achieving its environmental protection objectives and will also provide substantial advantages to its shareholders. Better sales and margins will result in higher profits and cash flow, everything else being equal.

We anticipate a 7% increase in Royal Caribbean's profits per share over the next five years, based on its current $8.00 per share earnings power. Royal Caribbean assumes the risks of fuel expenses and currency exposure, which are normal for cruise line operators.

Royal Caribbean hedges around fifty percent of its fuel expenses; thus, volatility will be decreased due to this reason. However, currency fluctuations may have a favorable or negative influence on earnings at any moment, depending on the direction of the US Dollar. Royal Caribbean's profits are vulnerable due to the fact that oil and gasoline costs remain at or around record highs.

Since the COVID epidemic, Royal Caribbean's price-to-earnings ratio has declined along with the rest of the industry. This has resulted in the stock being undervalued at the moment, creating an opportunity for longer-term investors who can bear the inherent risk associated with holding a travel-related stock at this time.

The current price-to-earnings ratio of 7.3 compares well with our assessment of fair value, which is nine times earnings. The growing valuation multiple might provide a 4.4 percent tailwind for yearly total returns over a five-year timeframe.

Due to the extra dilution and debt the operators incurred in order to survive COVID, our fair value estimates for the cruise lines are quite low by historical standards. In addition, while the present forecast is optimistic, it is accompanied by substantial uncertainty.

Overall, Royal Caribbean is prepared for total returns of 11.7%, powered by the valuation tailwind and earnings growth of 7%. There is no dividend, and we do not anticipate one in the near future.

Lindblad Expeditions

Lindblad Expeditions (NASDAQ: LIND) is not a normal cruise line, which might make it a safer investment than the majority of cruise stocks. Lindblad specializes in smaller, more costly adventure cruises, whereas competitors handle thousands of guests on each ship. Depending on the excursion, the maximum capacity for these cruises is between 48 and 148 persons.

Lindblad's primary competitive edge is its capacity to provide premium, one-of-a-kind experiences. Lindblad offers thrilling trips across the globe, including Antarctica, the Caribbean coast, and Patagonia. As a result of the sorts of tours provided, Lindblad has developed a dedicated clientele of affluent individuals.

According to Lindblad, most visitors who had canceled or postponed trips due to the pandemic opted for future travel credits over refunds. The travel industry has witnessed a large rise in bookings compared to periods before the epidemic. In its financial results for the third quarter of 2021, the company revealed that 2022 bookings were 51 percent ahead of 2021 bookings and 27 percent ahead of 2020 bookings.

The Walt Disney Company (NYSE: DIS)

Disney's current market capitalization is $323 billion. The company is well-known for its creation of media and entertainment.

After a little decline in March, Disney is now doing better than ever. Much of Disney's worth stems from its entertainment venues.

These include a variety of child- and family-oriented theme parks and cruise ships. Their present performance has been rather surprising, revealing how adaptable, risk-averse, and diversified their stock really is.

By expanding its industrial emphasis, Disney has been able to maintain its progressive progression. With the introduction of Disney+, the firm was able to capitalize on the pandemic's increased demand for video streaming services.

In light of its present overvaluation, analysts anticipate that Disney will provide below-average returns in the next few years.

Norwegian Cruise Line Holdings

Norwegian Cruise Line Holdings (NYSE: NCLH) is well-known for its laid-back attitude and popularity with casual passengers. Norwegian provides "freestyle cruising," in which there are no dress restrictions, specific meal hours, or allocated seats on its cruises.

Norwegian has a range of cabin classifications, allowing it to suit all types of passengers. It was the first cruise line to provide apartments solely for solitary passengers, and it offers accommodations for solo travelers and big families alike.

As its cruises restart, the cruise line has adopted some of the most stringent procedures to prevent COVID-19 outbreaks. It has a vaccination program of 100 percent, which was extended indefinitely in November 2021. Since all guests must be immunized, Norwegian is allowed to provide cruises without masks and without social separation rules.

This cruise line's ability to recover from the epidemic might be aided by pent-up demand. When Norwegian revealed its premium Oceania Cruise brand's winter 2022-23 itineraries, it established a single-day booking record. Norwegian anticipates that all its ships will resume operations by spring 2022.

OneSpa World Holdings Ltd. (NASDAQ: OSW)

OneSpa is a holding company that supplies cruise lines and other enterprises in the hospitality sector with product solutions. Their activities include selling high-end services in the fields of health, beauty, fitness, and wellbeing.

Norwegian, Royal Caribbean, and Carnival are a few cruise lines they serve. OneSpa is one of the leading luxury spa providers for the most prestigious hospitality companies, whether their customers are sailing or stationed at a range of travel and hospitality destinations on land.

OneSpa went public close to the end of 2017. Currently, stocks trade for $10 per stock. Although the stock price has achieved its initial public offering price, the corporation has not yet hit its pre-pandemic highs.

A market capitalization of more than $735 million indicates the company's potential for future growth. Now that cruise ships are again sailing, and their momentum should continue to improve.

Carnival Cruise Lines (CCL)

In 1972, Carnival Cruise Lines was formed as a modest cruise ship operator. Since 1987, the firm has been publicly listed, beginning a lengthy practice of deploying shareholder funds to acquire more cruise lines. Today, it operates around 90 ships under nine distinct brands and generates about $21 billion in yearly revenue pre-COVID. Today, the market valuation of the stock is $15.6 billion.

On March 22, 2022, Carnival announced its numbers for the first quarter, and both sales and profitability were below expectations. The loss per share was $1.66, 38 cents less than anticipated, while sales were $1.62 billion, $640 million less than anticipated. Similar to Norwegian, Carnival generated almost little income in the first quarter of 2017.

The business said that revenue per passenger cruise day increased by 7.5% compared to 2019 and that 75% of total capacity had returned to regular operations. Carnival anticipates positive adjusted EBITDA for the summer season and a loss for the whole year despite a profit for the third quarter.

We assess Carnival's earnings power at $2.25 per share but anticipate a 7 percent increase in the next few years. The company's fleet optimization approach has resulted in a more fuel-efficient fleet that also optimizes onboard expenditure. Both of these factors contribute to increased profits, and Carnival sees healthy ticket demand in terms of both volume and price.

Carnival's shares trade at a discount of 6.2 times earnings power compared to our fair value estimate of nine times earnings. This might provide a 7,7 percent tailwind to the value in the years to come, and in combination with the predicted profits growth of 7 percent, we anticipate future annual returns of 15,2 percent.

As of the conclusion of the first quarter, Carnival had $29 billion in net debt, indicating that it is heavily leveraged. In light of this, Carnival faces a greater risk and will find it more difficult to finally pay dividends to its shareholders. We feel Carnival is the furthest away from being able to return cash to shareholders; therefore, potential purchasers should bear this in mind.

Final thoughts

The exceptionally high anticipated rate of return for the three largest cruise line stocks implies a long-term restoration to regular operations. Future returns are also reliant on their reduced valuation multiples, which might increase if the coronavirus epidemic is halted as quickly as possible.

Obviously, there is no assurance that this will occur in the near future. Consequently, investors may anticipate prolonged volatility in the main cruise line stocks. If these cruise line stocks can return to growth, their reduced values might make them attractive investments, but investors must practice patience.

We advise investors to have a long-term perspective when evaluating cruise line stocks. Given these characteristics, we believe that Royal Caribbean is now the best stock for long-term income investors among cruise line operators.

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How to Play Royal Caribbean (RCL) Ahead of Q1 Earnings?

Royal Caribbean Group ( RCL Quick Quote RCL - Free Report ) is scheduled to report first-quarter 2024 results on Apr 25, before the opening bell. The Zacks Consensus Estimate for earnings is pegged at $1.30 per share. In the prior-year quarter, RCL reported adjusted loss per share of 23 cents. The consensus mark for revenues is pegged at $3.64 billion, suggesting 26.3% jump from a year ago. The company is likely to have been aided by strong cruising demand from new and loyal guests, robust booking trends and new ship addition. Our model predicts passenger ticket revenues, and onboard and other revenues to improve 15.8% and 23.2% from the year-ago levels to $2,195.6 million and $1,218.1 million, respectively.  We expect occupancy to be 105%. The cruise industry giant's performance outlook appears promising, but investors must weigh potential risks against anticipated rewards before making investment decisions.

Royal Caribbean Cruises Ltd. Price and EPS Surprise

Royal Caribbean Cruises Ltd. price-eps-surprise | Royal Caribbean Cruises Ltd. Quote

Solid Booking Trends and New Ship Additions Drive Optimism

RCL’s results are likely to be aided by solid booking volumes concerning all key itineraries. Rise in consumer spending onboard and pre-cruise purchases are expected to bode well. With a load factor of 105% in the previous quarter, indicating full capacity operations, it is poised to capitalize on active consumer engagement and outperform the broader travel industry. Early booking patterns and heightened onboard spending reflect active consumer engagement, positioning Royal Caribbean favorably to outperform the broader travel industry and attract new clients. With projected 40% earnings growth, 2024 is anticipated to be a record-breaking year, in line with the company's strategic objectives. On the other hand, Royal Caribbean continues to benefit from new ship addition. Management focuses on new innovative ships and onboard experiences to differentiate its offering as well as deliver superior yields and margins. In 2023, RCL unveiled three new ships that align with its strategy and are poised to generate higher yields 2024 onward. In 2024, management anticipates capacity to increase by 8.5% from the year-ago levels with the introduction of Utopia of the Seas and Silver Ray. The new vessels enhance vacation experiences, attract fresh customers to RCL’s brands, and contribute to yield improvements and overall profitability.

High Costs Pose Challenges

Despite the optimistic outlook, Royal Caribbean faces challenges associated with high expenses primarily due to a rise in food, fuel and onboard expenses. It also expects fuel costs to increase and continue through 2025. Our model predicts, total cruise operating expenses to increase 4.2% from the year-earlier levels in first-quarter 2024.

Investment Considerations: Balancing Risk and Reward

While Royal Caribbean's performance outlook appears promising, investors should exercise caution given the stock's recent surge in value. Over the past year, the company’s shares have skyrocketed by 111.5%, outperforming the industry's growth of 11.2%. As RCL has significantly outperformed the industry in the past year, its valuation looks a bit stretched compared with its own range as well as the industry average. The stock is currently trading at 2.07X forward 12-month sales, which compares with 1.29X for the Zacks sub-industry and 1.61X for the Zacks sector. As investors await Royal Caribbean's first-quarter earnings report, its solid booking trends, new ship additions and anticipated financial performance paint a positive picture. However, concerns over high costs and stretched valuation warrant caution for potential investors. While Royal Caribbean's long-term prospects remain promising as the travel industry continues to recover, it may be prudent to wait for a more attractive entry point.

What the Zacks Model Unveils

Per our proven model, stocks with a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) are likely to beat on earnings. At present, Royal Caribbean has an Earnings ESP of +5.30% and a Zacks Rank of 3. Hence, it is presumed that Royal Caribbean is likely to beat estimates this earnings season.   In the last reported quarter, RCL delivered an earnings surprise of 10.6%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter .

Other Stocks Poised to Beat on Earnings

Here are some other stocks from the Zacks Consumer Discretionary sector that investors may consider, as our model shows that these, too, have the right combination of elements to post an earnings beat. Fox Corporation ( FOXA Quick Quote FOXA - Free Report ) has an Earnings ESP of +15.53% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here . FOXA is expected to register a 23.4% increase in earnings for the to-be-reported quarter. It reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 71.1%. DraftKings Inc. ( DKNG Quick Quote DKNG - Free Report ) currently has an Earnings ESP of +36.22% and a Zacks Rank of 3. DKNG’s earnings for the to-be-reported quarter are expected to increase 67.8%. It reported better-than-expected earnings in two of the trailing four quarters and missed on the other two occasions, with a negative surprise of 57.1%, on average. Funko, Inc. ( FNKO Quick Quote FNKO - Free Report ) currently has an Earnings ESP of +6.90% and a Zacks Rank of 3. FNKO’s earnings for the to-be-reported quarter are expected to increase 40.8%. It reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 42.8%. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar .

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Yahoo Finance

3 best cruise stocks to buy on any covid variant volatility.

Don’t count out the cruise stocks. The cruise industry is forecast to rebound this year, and is expected to reach $57 billion in annual revenues by 2027, according to market research firm Statista.

After two very difficult years, cruise operators are cautiously optimistic about 2022 with bookings for the second half of this year at pre-pandemic levels and new medications to contain and treat Covid-19 becoming available.

While cruise stocks remain volatile, they have turned in a positive direction over the last month and been steadily rising since December. Analysts forecast more gains ahead as the industry’s recovery kicks into high gear in the coming months.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

7 Undervalued Stocks to Buy Before Wall Street Catches On

Here are three of the best cruise stocks to buy should there be another dip in prices or if Covid-19 variant volatility persists.

Carnival ( NYSE: CCL )

Royal Caribbean Cruises ( NYSE: RCL )

Norwegian Cruise Line ( NYSE: NCLH )

Cruise Stocks to Buy: Carnival (CCL)

Source: Flickr

Shares of Carnival are again marching higher, having gained 28% over the last month to now trade at nearly $23. However, CCL stock still remains nearly 30% below its 52-week high. That should provide an indication of just how volatile stocks of cruise lines have been over the past year.

The latest increase in the share price is being driven by rising optimism that the Doral, Florida-based company’s business will improve further this year as we put the global pandemic behind us for good. A December update from Carnival sounded a positive note to investors, with the company stating that its sales grew to 58% of pre-pandemic levels in the fourth quarter of 2021.

Carnival has said that it plans to have its entire fleet of more than 100 vessels in operation by this spring as it seeks to push its current volume past pre-pandemic levels and to new milestones. Carnival shares got a further boost after the company said just prior to the new year that it forecasts posting a profit in the second quarter of 2022, and that advanced bookings for the second half of 2022 and into 2023 are already at 2019 levels, before the pandemic devastated its operations.

Of course, any unexpected developments related to Covid-19 or new lockdown measures could derail Carnival’s progress. But for now, it looks to be full steam ahead for the company.

Royal Caribbean (RCL)

Source: ImagineStock / Shutterstock.com

Shares of Royal Caribbean are also trending higher, though not as briskly as those of Carnival. In the past 30 days, RCL stock has risen almost 20%.

The increase is a bit surprising coming as it does after notorious short seller Hindenburg Research said publicly that it has bet against the cruise line operator. In a series of tweets, Hindenburg said “The outlook for ‘Royal Caribbean’ and the cruise industry is far more grim than other hospitality and leisure ‘post-Covid’ stories.” Royal Caribbean’s share price immediately fell on the news but quickly rebounded and has been on an upswing since mid-December.

The gains in RCL stock also come despite the cruise operator canceling several of its recent sailings. Earlier in January, Royal Caribbean canceled its Spectrum of the Seas cruise after several guests came into close contact with Covid-19 and over fears related to the Omicron variant of the respiratory disease.

Investors seem to now be looking past the pandemic and to a recovery for Royal Caribbean’s operations over the course of this year. The company has said that bookings for 2023 fall within historical ranges and have been driven by strong and growing demand from American travelers.

Cruise Stocks to Buy: Norwegian Cruise Lines (NCLH)

Source: Vytautas Kielaitis/shutterstock.com

Like the other stocks on this list, shares in Norwegian Cruise Lines are rallying lately. NCLH stock is up 13% over the past month, outpacing the benchmark S&P 500 index that is in negative territory so far this year.

As with other cruise lines, sentiment is improving as investors look out at bookings in the second half of this year and into 2023. Norwegian has publicly stated that it plans to have its entire fleet in service by April and expects to turn a profit in the second half of this year.

In addition to its 28 ships, Miami, Florida-based Norwegian also runs a separate tourism service that compliments its seagoing enterprise.

Norwegian’s stock got a boost from the company’s most recent earnings report, which benefited from some very easy comparables. The company reported third quarter revenue of $153.08 million as its ships returned to service in the summer months. The Q3 revenues were up 2,248% year-over-year (in Q3 2020 the ships were grounded and the company had no real revenue). However, Norwegian did miss Wall Street’s revenue estimate by nearly $20 million.

Still, expectations are that Norwegian’s business will strengthen as we progress through 2022 and move into next year, which should help lift the share price even higher.

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On the date of publication, Joel Baglole 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 .

The post 3 Best Cruise Stocks to Buy on Any Covid Variant Volatility appeared first on InvestorPlace .