Head-To-Head Survey: Travel + Leisure (NYSE:TNL) vs. Carnival (NYSE:CUK)

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

Profitability

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

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

Dividends

Travel + Leisure pays an annual dividend of $2.40 per share and has a dividend yield of 3.4%. Carnival pays an annual dividend of $0.15 per share and has a dividend yield of 0.6%. Travel + Leisure pays out 70.4% of its earnings in the form of a dividend. Carnival pays out 6.7% 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 increased 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.

Volatility and Risk

Travel + Leisure has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500. Comparatively, Carnival has a beta of 2.51, suggesting that its stock price is 151% more volatile than the S&P 500.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Travel + Leisure	0	3	8	0	2.73
Carnival	0	1	1	0	2.50

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

Earnings & Valuation

This table compares Travel + Leisure and Carnival”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Travel + Leisure	$4.02 billion	1.11	$230.00 million	$3.41	20.89
Carnival	$26.62 billion	0.18	$2.76 billion	$2.25	11.37

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.

Institutional and Insider Ownership

87.5% of Travel + Leisure shares are held by institutional investors. Comparatively, 23.8% of Carnival shares are held by institutional investors. 3.8% of Travel + Leisure shares are held by insiders. Comparatively, 0.1% of Carnival shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Travel + Leisure beats Carnival on 11 of the 17 factors compared between the two stocks.

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.

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.