Critical Review: Carnival (NYSE:CCL) vs. Town Sports International (OTCMKTS:CLUBQ)

Carnival (NYSE:CCL) and Town Sports International (OTCMKTS:CLUBQ) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, profitability, dividends, valuation, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Carnival and Town Sports International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carnival	0	9	19	0	2.68
Town Sports International	0	0	0	0	0.00

Carnival presently has a consensus price target of $34.70, suggesting a potential upside of 40.45%. Given Carnival’s stronger consensus rating and higher possible upside, research analysts plainly believe Carnival is more favorable than Town Sports International.

Valuation and Earnings

This table compares Carnival and Town Sports International”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carnival	$26.62 billion	1.15	$2.76 billion	$2.00	12.35
Town Sports International	N/A	N/A	N/A	N/A	N/A

Carnival has higher revenue and earnings than Town Sports International.

Profitability

This table compares Carnival and Town Sports International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carnival	10.37%	28.39%	6.09%
Town Sports International	N/A	N/A	N/A

Institutional & Insider Ownership

67.2% of Carnival shares are held by institutional investors. 7.9% of Carnival shares are held by insiders. Comparatively, 32.2% of Town Sports International shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Carnival beats Town Sports International on 8 of the 9 factors compared between the two stocks.

About Carnival

Carnival Corp. engages in the operation of cruise ships. It operates through the following business segments: North America and Australia (NAA) Cruise, Europe and Asia (EA) Cruise Operations, Cruise Support, and Tour and Others. The North America and Australia (NAA) Cruise segment includes the Carnival Cruise Line, Holland America Line, Princess Cruises, and Seabourn. The Europe and Asia (EA) Cruise Operations segment consists of AIDA, Costa, Cunard, and P&O Cruises (UK). The Cruise Support segment represents port destinations and private islands for the benefit of its cruise brands. The Tour and Other segment operates hotel and transportation operations of Holland America Princess Alaska Tours. The company was founded in 1972 and is headquartered in Miami, FL.

About Town Sports International

Town Sports International Holdings, Inc., together with its subsidiaries, owns and operates fitness clubs in the Northeast and Mid-Atlantic regions of the United States. The company's clubs offer special purpose rooms for group fitness classes; and other exercise programs, as well as accommodate cardiovascular and strength-training equipment. Its clubs also provide amenities, including swimming pools, racquet and basketball courts, and functional training zones, as well as babysitting services; and fee-based program services, which comprise personal and small group training, children's programs, and summer camps for kids. The company sells its memberships through direct sales at the club level, as well as corporate and group sales; and through its Websites. As of December 31, 2019, it owned and operated 186 fitness clubs. The company was founded in 1973 and is based in Jupiter, Florida.