Carnival Corporation (CCL): Is This Company A Prime Destination for Investors?

Page 1 of 2

The largest cruise company in the world, Carnival Corporation (NYSE:CCL), is trading 9.98% lower from where it started in 2013, a rarity in this bull market.

Carnival Corporation (NYSE:CCL)

The company operates about 100 cruise ships and tour companies in Alaska and Canada. Based on market capitalization, Carnival Corporation (NYSE:CCL) is valued at $26.73 billion, and the stock carries a price to book ratio of 1.13. Currently, the company carries a TTM profit margin of 9.58%.

With Carnival Corporation (NYSE:CCL) trading at nearly half of its all time-highs, is the company a bargain in this inflated market, or should investors look for a different company to set sail on?

Strengths:

Historic Revenue Growth:
In 2003, Carnival Corporation (NYSE:CCL) reported revenue of $6.71 billion; in 2012, the company announced revenue of $15.38 billion, representing year over year annual growth of 9.65%, a strong trend that should continue into the future, with projections placing 2015 revenue at $18.35 billion. This growth has been a result of multiple mergers and a rapidly growing fleet.

Institutional Vote of Confidence: 79% of shares outstanding are held by institutional investors, representing over $17 billion in investment, displaying the confidence some of largest investors in the world have in the company and its future.
Leading Industry Position: Carnival is more than double the size of its biggest competitor, operates 100 ships with an estimated capacity of over 200,000 passengers, and employs 85,400 people.  With this leading market position and established nature comes a greater level of security and predictability for investors.
Reasonable Valuation: At the moment, the company carries a price to earnings ratio of 17.49, a price to book ratio of 1.13, and a price to sales ratio of 1.68; all of which indicate a company trading with fairly reasonable valuations.
Cash Flow Position: In 2012, Carnival Corporation (NYSE:CCL) generated $2.82 billion in cash flow, allowing the company to pay out its dividend yielding 3.02%
Weaknesses:

Net Debt: The company’s $465 million in cash and cash equivalents is outweighed by its $7.16 billion debt load, resulting in a net debt of $6.69 billion, accounting for 23.44% of market capitalization, a major financial weakness of the company.
Margin Contraction: Over the past decade, Carnival Corporation (NYSE:CCL)’s TTM profit margin has gradually declined, representing a substantial weakening in the company’s profitability.

Opportunities:

Dividend Growth: Since implementing their dividend program in 1988, Carnival has consistently raised their dividend payouts, and is widely anticipated to do so into the future.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!