Contrasting Norwegian Cruise Line (NYSE:NCLH) & PENN Entertainment (NASDAQ:PENN)

PENN Entertainment (NASDAQ:PENN) and Norwegian Cruise Line (NYSE:NCLH) are both mid-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Volatility & Risk

PENN Entertainment has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500. Comparatively, Norwegian Cruise Line has a beta of 1.88, meaning that its share price is 88% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for PENN Entertainment and Norwegian Cruise Line, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PENN Entertainment	1	7	12	0	2.55
Norwegian Cruise Line	1	15	5	2	2.35

PENN Entertainment currently has a consensus price target of $23.53, suggesting a potential upside of 45.87%. Norwegian Cruise Line has a consensus price target of $20.95, suggesting a potential upside of 46.50%. Given Norwegian Cruise Line’s higher possible upside, analysts plainly believe Norwegian Cruise Line is more favorable than PENN Entertainment.

Institutional & Insider Ownership

91.7% of PENN Entertainment shares are held by institutional investors. Comparatively, 69.6% of Norwegian Cruise Line shares are held by institutional investors. 3.2% of PENN Entertainment shares are held by insiders. Comparatively, 0.3% of Norwegian Cruise Line shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares PENN Entertainment and Norwegian Cruise Line”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PENN Entertainment	$6.96 billion	0.31	-$843.10 million	($6.36)	-2.54
Norwegian Cruise Line	$9.83 billion	0.67	$423.25 million	$1.60	8.94

Norwegian Cruise Line has higher revenue and earnings than PENN Entertainment. PENN Entertainment is trading at a lower price-to-earnings ratio than Norwegian Cruise Line, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares PENN Entertainment and Norwegian Cruise Line’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PENN Entertainment	-12.66%	2.93%	0.39%
Norwegian Cruise Line	7.49%	41.38%	4.21%

Summary

Norwegian Cruise Line beats PENN Entertainment on 11 of the 15 factors compared between the two stocks.

About PENN Entertainment

PENN Entertainment, Inc., together with its subsidiaries, provides integrated entertainment, sports content, and casino gaming experiences. The company operates through five segments: Northeast, South, West, Midwest, and Interactive. It operates online sports betting in various jurisdictions; and iCasino under Hollywood Casino, L'Auberge, ESPN BET, and theScore Bet Sportsbook and Casino brands. The company's portfolio also includes PENN Play, customer loyalty program, which offers a set of rewards and experiences for business channels. In addition, it owns various trademarks and service marks, including Ameristar, Argosy, Boomtown, Hollywood Casino, Hollywood Gaming, L'Auberge, PENN Play, theScore, theScore Bet, theScore esports, and M Resort. The company was formerly known as Penn National Gaming, Inc. and changed its name to PENN Entertainment, Inc. in August 2022. PENN Entertainment, Inc. was founded in 1972 and is based in Wyomissing, Pennsylvania.

About Norwegian Cruise Line

Norwegian Cruise Line Holdings Ltd., together with its subsidiaries, operates as a cruise company in North America, Europe, the Asia-Pacific, and internationally. The company operates through the Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands. It offers itineraries ranging from three days to a 180-days calling on various ports, including Scandinavia, Northern Europe, the Mediterranean, the Greek Isles, Alaska, Canada and New England, Hawaii, Asia, Tahiti and the South Pacific, Australia and New Zealand, Africa, India, South America, the Panama Canal, and the Caribbean. It distributes its products through retail/travel advisor and onboard cruise sales channels, as well as meetings, incentives, and charters. Norwegian Cruise Line Holdings Ltd. was founded in 1966 and is based in Miami, Florida.