Financial Review: Town Sports International (OTCMKTS:CLUBQ) versus Royal Caribbean Cruises (NYSE:RCL)

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

Profitability

This table compares Town Sports International and Royal Caribbean Cruises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Town Sports International	N/A	N/A	N/A
Royal Caribbean Cruises	20.97%	47.15%	10.19%

Institutional and Insider Ownership

87.5% of Royal Caribbean Cruises shares are owned by institutional investors. 32.2% of Town Sports International shares are owned by insiders. Comparatively, 7.0% of Royal Caribbean Cruises shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Town Sports International and Royal Caribbean Cruises, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Town Sports International	0	0	0	0	0.00
Royal Caribbean Cruises	0	4	19	1	2.88

Royal Caribbean Cruises has a consensus target price of $326.95, indicating a potential upside of 4.00%. Given Royal Caribbean Cruises’ stronger consensus rating and higher possible upside, analysts clearly believe Royal Caribbean Cruises is more favorable than Town Sports International.

Valuation and Earnings

This table compares Town Sports International and Royal Caribbean Cruises”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Town Sports International	N/A	N/A	N/A	N/A	N/A
Royal Caribbean Cruises	$16.48 billion	5.18	$2.88 billion	$13.34	23.57

Royal Caribbean Cruises has higher revenue and earnings than Town Sports International.

Summary

Royal Caribbean Cruises beats Town Sports International on 9 of the 10 factors compared between the two stocks.

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.

About Royal Caribbean Cruises

Royal Caribbean Cruises Ltd. operates as a cruise company worldwide. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, and Silversea Cruises brands, which comprise a range of itineraries. As of February 21, 2024, it operated 65 ships. Royal Caribbean Cruises Ltd. was founded in 1968 and is headquartered in Miami, Florida.