Royal Caribbean Cruises (NYSE:RCL) & Flight Centre (OTCMKTS:FGETF) Critical Review

Flight Centre (OTCMKTS:FGETF) and Royal Caribbean Cruises (NYSE:RCL) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Institutional & Insider Ownership

87.5% of Royal Caribbean Cruises shares are held by institutional investors. 7.0% of Royal Caribbean Cruises shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Flight Centre and Royal Caribbean Cruises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flight Centre	N/A	N/A	N/A
Royal Caribbean Cruises	23.33%	44.68%	10.36%

Valuation and Earnings

This table compares Flight Centre and Royal Caribbean Cruises”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flight Centre	$1.80 billion	0.99	$70.90 million	N/A	N/A
Royal Caribbean Cruises	$17.44 billion	4.17	$2.88 billion	$14.87	17.94

Royal Caribbean Cruises has higher revenue and earnings than Flight Centre.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Flight Centre and Royal Caribbean Cruises, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flight Centre	0	0	1	1	3.50
Royal Caribbean Cruises	0	4	19	1	2.88

Royal Caribbean Cruises has a consensus price target of $326.64, indicating a potential upside of 22.45%. Given Royal Caribbean Cruises’ higher possible upside, analysts plainly believe Royal Caribbean Cruises is more favorable than Flight Centre.

Volatility & Risk

Flight Centre has a beta of -0.16, suggesting that its stock price is 116% less volatile than the S&P 500. Comparatively, Royal Caribbean Cruises has a beta of 2.04, suggesting that its stock price is 104% more volatile than the S&P 500.

Summary

Royal Caribbean Cruises beats Flight Centre on 11 of the 12 factors compared between the two stocks.

About Flight Centre

Flight Centre Travel Group Limited provides travel retailing services for the leisure and corporate sectors in Australia, New Zealand, the Americas, Europe, the Middle East, Africa, Asia, and internationally. The company offers leisure travel services for the niche sectors, as well as mass, youth, premium, and cruise markets; and corporate travel services for organizations of various sizes across industries, as well as supplies products to its national and international network, or travel retail outlets. It also provides tour operations, hotel management, and destination management services. In addition, the company offers other travel related services, including foreign currency exchange and travel academies; recruitment marketing and bike retailing; and employee benefit services. It provides its services primarily under the Flight Centre brand, as well as other travel brands, such as Student Flights, Travel Associates, Liberty Travel, Infinity Holidays, GOGO Vacations, FCm Travel Solutions, Corporate Traveller, Stage and Screen, and cievents. The company was formerly known as Flight Centre Limited and changed its name to Flight Centre Travel Group Limited in November 2013. The company was incorporated in 1987 and is headquartered in South Brisbane, Australia.

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.