Financial Survey: Travel + Leisure (NYSE:TNL) vs. Carnival (NYSE:CCL)

Carnival (NYSE:CCL) and Travel + Leisure (NYSE:TNL) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, valuation, analyst recommendations and dividends.

Volatility & Risk

Carnival has a beta of 2.48, meaning that its share price is 148% more volatile than the S&P 500. Comparatively, Travel + Leisure has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.

Valuation & Earnings

This table compares Carnival and Travel + Leisure”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carnival	$26.62 billion	1.19	$2.76 billion	$2.25	11.40
Travel + Leisure	$4.02 billion	1.11	$230.00 million	$3.41	20.89

Carnival has higher revenue and earnings than Travel + Leisure. Carnival is trading at a lower price-to-earnings ratio than Travel + Leisure, indicating that it is currently the more affordable of the two stocks.

Dividends

Carnival pays an annual dividend of $0.60 per share and has a dividend yield of 2.3%. Travel + Leisure pays an annual dividend of $2.40 per share and has a dividend yield of 3.4%. Carnival pays out 26.7% of its earnings in the form of a dividend. Travel + Leisure pays out 70.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Travel + Leisure has raised its dividend for 5 consecutive years. Travel + Leisure is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

67.2% of Carnival shares are held by institutional investors. Comparatively, 87.5% of Travel + Leisure shares are held by institutional investors. 7.9% of Carnival shares are held by company insiders. Comparatively, 3.8% of Travel + Leisure shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Carnival and Travel + Leisure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carnival	11.48%	26.92%	6.20%
Travel + Leisure	5.74%	-47.77%	6.24%

Analyst Recommendations

This is a breakdown of recent ratings for Carnival and Travel + Leisure, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carnival	0	6	21	0	2.78
Travel + Leisure	0	3	8	0	2.73

Carnival currently has a consensus target price of $34.17, indicating a potential upside of 33.23%. Travel + Leisure has a consensus target price of $85.90, indicating a potential upside of 20.59%. Given Carnival’s stronger consensus rating and higher probable upside, analysts clearly believe Carnival is more favorable than Travel + Leisure.

Summary

Carnival beats Travel + Leisure on 11 of the 17 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 Travel + Leisure

Travel + Leisure Co., together with its subsidiaries, provides hospitality services and travel products in the United States and internationally. The company operates in two segments, Vacation Ownership; and Travel and Membership. The Vacation Ownership segment develops, markets, and sells vacation ownership interests (VOIs) to individual consumers, as well as provides consumer financing in connection with the sale of VOIs; and property management services at resorts. The Travel and Membership segment operates various travel businesses, including three vacation exchange brands, travel technology platforms, travel memberships, and direct-to-consumer rentals. This segment also offers private-label travel booking technology solutions. The company was formerly known as Wyndham Destinations, Inc. and changed its name to Travel + Leisure Co. in February 2021. Travel + Leisure Co. was founded in 1990 and is headquartered in Orlando, Florida.