Comparing Target Hospitality (NASDAQ:TH) & Carnival (NYSE:CCL)

Carnival (NYSE:CCL) and Target Hospitality (NASDAQ:TH) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Carnival and Target Hospitality, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carnival	1	5	21	0	2.74
Target Hospitality	1	0	2	1	2.75

Carnival currently has a consensus target price of $33.99, suggesting a potential upside of 16.37%. Target Hospitality has a consensus target price of $16.50, suggesting a potential upside of 11.19%. Given Carnival’s higher probable upside, research analysts clearly believe Carnival is more favorable than Target Hospitality.

Volatility and Risk

Carnival has a beta of 2.48, suggesting that its share price is 148% more volatile than the S&P 500. Comparatively, Target Hospitality has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Profitability

This table compares Carnival and Target Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carnival	11.48%	26.92%	6.20%
Target Hospitality	-11.58%	-8.65%	-6.41%

Insider and Institutional Ownership

67.2% of Carnival shares are owned by institutional investors. Comparatively, 32.4% of Target Hospitality shares are owned by institutional investors. 7.9% of Carnival shares are owned by insiders. Comparatively, 3.8% of Target Hospitality shares are owned by 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.

Earnings and Valuation

This table compares Carnival and Target Hospitality”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carnival	$26.62 billion	1.36	$2.76 billion	$2.25	12.98
Target Hospitality	$320.64 million	4.64	-$37.12 million	($0.38)	-39.05

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

Summary

Carnival beats Target Hospitality on 12 of the 15 factors compared between the two stocks.

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.

About Target Hospitality

Target Hospitality Corp. operates as a specialty rental and hospitality services company in North America. The company operates through two segments, Hospitality & Facilities Services – South and Government. It owns a network of specialty rental accommodation units. In addition, the company provides catering and food, maintenance, housekeeping, grounds-keeping, security, health and recreation facilities, workforce community management, concierge, and laundry services. It serves the U.S. government contractors and investment grade natural resource development companies. Target Hospitality Corp. was founded in 1978 and is headquartered in The Woodlands, Texas.