You are here: Home - Investing - Getting Started -

Stock of the week: Carnival

Written by:
Ian Forrest, investment research analyst at The Share Centre, picks the world's largest cruise company Carnival as stock of the week.

The world’s largest cruise company, Carnival, is our stock of the week this week. Cruise tourism is becoming an increasingly popular ‘leisure choice’ with holiday volumes up 20%. It is one of the fastest-growing sectors of the tourism industry. This trend is likely to continue and, as the biggest operator, Carnival is in a strong position to reap the rewards.

The socio-economic environment appears to be favourable for the cruise company. A widened global reach is in the pipeline as Carnival has expanded its horizons further with the extension into emerging markets such as China.

Riding on the back of last year’s momentum, the group has turned in strong Q1 figures with net income rising 11% to $391m, and revenue up 10.5% to $4.2bn. Investors should note the shares have outperformed market competitors over the past year, now trading on a 2019 Price to Earnings of 12.7; the dividend yield also outpaces peers at 3.1%. The group is actively responding to increasing demand, boosting its capacity through the purchase of two new cruise ships.

Further increasing Carnival’s attraction for investors is the strong cash flow which has enabled the group to raise dividends swiftly and support a share repurchase scheme. Considering the optimistic growth prospects, we recommend Carnival shares as a ‘buy’ for those willing to accept a medium level of risk and seeking a mixture of income and growth.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Highest dividends ‘could be on shaky ground’

Some of the highest forecast dividend yields for FTSE 100 copmanies are starting to look ‘questionably high’ according to AJ...