Carnival (NYSE:CCL) versus Shake Shack (NYSE:SHAK) Head to Head Comparison

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

Volatility and Risk

Shake Shack has a beta of 1.66, suggesting that its share price is 66% more volatile than the S&P 500. Comparatively, Carnival has a beta of 2.31, suggesting that its share price is 131% more volatile than the S&P 500.

Earnings & Valuation

This table compares Shake Shack and Carnival”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shake Shack	$1.45 billion	1.72	$45.72 million	$0.94	61.77
Carnival	$27.31 billion	1.11	$2.76 billion	$2.22	9.95

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

Profitability

This table compares Shake Shack and Carnival’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shake Shack	2.56%	9.29%	2.71%
Carnival	11.24%	26.11%	6.36%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Shake Shack and Carnival, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shake Shack	0	12	16	0	2.57
Carnival	0	6	17	2	2.84

Shake Shack presently has a consensus target price of $89.71, indicating a potential upside of 54.50%. Carnival has a consensus target price of $34.56, indicating a potential upside of 56.40%. Given Carnival’s stronger consensus rating and higher possible upside, analysts clearly believe Carnival is more favorable than Shake Shack.

Institutional and Insider Ownership

86.1% of Shake Shack shares are owned by institutional investors. Comparatively, 67.2% of Carnival shares are owned by institutional investors. 8.3% of Shake Shack shares are owned by company insiders. Comparatively, 7.9% of Carnival shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Carnival beats Shake Shack on 11 of the 15 factors compared between the two stocks.

About Shake Shack

Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. The company was founded in 2001 and is headquartered in New York, New York.

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.