Critical Comparison: Reading International (NASDAQ:RDI) and Carnival (NYSE:CUK)

Carnival (NYSE:CUK) and Reading International (NASDAQ:RDI) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Volatility & Risk

Carnival has a beta of 2.57, meaning that its share price is 157% more volatile than the S&P 500. Comparatively, Reading International has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Insider and Institutional Ownership

23.8% of Carnival shares are held by institutional investors. Comparatively, 44.7% of Reading International shares are held by institutional investors. 0.1% of Carnival shares are held by company insiders. Comparatively, 32.4% of Reading International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Carnival	10.07%	27.86%	5.64%
Reading International	-6.52%	N/A	-3.09%

Earnings & Valuation

This table compares Carnival and Reading International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carnival	$25.02 billion	0.19	$1.92 billion	$1.92	13.28
Reading International	$211.29 million	0.12	-$35.30 million	($0.61)	-1.90

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Carnival and Reading International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carnival	0	1	0	0	2.00
Reading International	1	0	0	0	1.00

Summary

Carnival beats Reading International on 10 of the 12 factors compared between the two stocks.

About Carnival

Carnival Plc operates as a global cruise and vacation company. The firm offers holiday and vacation products to a customer base that is broadly varied in terms of cultures, languages and leisure-time preferences. It operates through the North America and Australia (NAA), Europe and Asia (EA), Cruise Support, and Tour and Other segments. The NAA segment includes Carnival Cruise Line, Holland America Line, P and O Cruises (Australia), Princess and Seabourn. The EA segment includes AIDA, Costa, Cunard, and P and O Cruises (UK). The Cruise Support segment includes a portfolio of port destinations and other services, all of which are operated for the benefit of cruise brands. The Tour and Other segment represents the hotel and transportation operations of Holland America Princess Alaska Tours and other operations. The company was founded on July 19, 2000 and is headquartered in Southampton, the United Kingdom.

About Reading International

Reading International, Inc., together with its subsidiaries, focuses on the ownership, development, and operation of entertainment and real property assets in the United States, Australia, and New Zealand. The company operates in two segments, Cinema Exhibition and Real Estate. The Cinema Exhibition segment operates multiplex cinemas. This segment operates its cinema exhibition businesses under the Reading Cinemas, Consolidated Theatres, Angelika Film Center, State Cinema by Angelika, Angelika Anywhere, Event Cinemas, and Rialto Cinemas brands. The Real Estate segment develops, rents, or licenses retail, commercial, and live theater assets. Reading International, Inc. was incorporated in 1999 and is headquartered in New York, New York.