Financial Analysis: Carnival (NYSE:CCL) & Studio City Ih (NYSE:MSC)

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

Analyst Recommendations

This is a breakdown of current recommendations for Studio City Ih and Carnival, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Studio City Ih	1	0	0	0	1.00
Carnival	0	8	16	2	2.77

Carnival has a consensus price target of $33.33, suggesting a potential upside of 25.55%. Given Carnival’s stronger consensus rating and higher probable upside, analysts plainly believe Carnival is more favorable than Studio City Ih.

Profitability

This table compares Studio City Ih and Carnival’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Studio City Ih	-10.13%	-10.36%	-2.21%
Carnival	10.07%	27.86%	5.64%

Earnings and Valuation

This table compares Studio City Ih and Carnival”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Studio City Ih	$687.15 million	1.13	-$105.83 million	($0.34)	-10.88
Carnival	$26.23 billion	1.18	$1.92 billion	$1.92	13.83

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

Institutional & Insider Ownership

67.2% of Carnival shares are owned by institutional investors. 54.9% of Studio City Ih shares are owned by company insiders. Comparatively, 7.6% of Carnival shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Studio City Ih has a beta of -0.17, indicating that its share price is 117% less volatile than the S&P 500. Comparatively, Carnival has a beta of 2.67, indicating that its share price is 167% more volatile than the S&P 500.

Summary

Carnival beats Studio City Ih on 14 of the 15 factors compared between the two stocks.

About Studio City Ih

Studio City International Holdings Limited operates an entertainment resort in Macau. It operates Studio City Casino, comprising gaming tables, including tables for VIP rolling chip operations and gaming machines; and resort, which offers various non-gaming attractions, including figure-8 ferris wheel, night club and karaoke venue, live performance arena, and an outdoor and indoor water park, as well as hotel rooms and various food and beverage establishments, and retail space. The company was formerly known as Cyber One Agents Limited and changed its name to Studio City International Holdings Limited in January 2012. The company was founded in 2000 and is based in Central, Hong Kong. Studio City International Holdings Limited is a subsidiary of MCO Cotai Investments Limited.

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.